SpruceLand to Sell Substantially all of its Operating Assets

EDMONTON, Dec. 16, 2015 /CNW/ - SpruceLand Properties Inc. ("SpruceLand" or the "Corporation") today announced that it has conditionally agreed to sell the bulk of its portfolio of commercial properties (representing 93% of the portfolio by net leasable area), and its manufactured home communities, to two independent purchasers for an aggregate purchase price of approximately $101.6 million dollars. 

The purchase and sale agreement for the commercial properties (the "Commercial Properties Disposition") provides for a purchase price of approximately $61.0 million, which is to be satisfied by: (i) the assumption of mortgages with an aggregate principal balance of approximately $26.1 million; and (ii) a cash payment of approximately $34.9 million. The Commercial Properties Purchase and Sale Agreement ("CPPSA") also contains customary provisions for transactions of this nature, including conditions, representations, warranties, covenants and indemnities.

The purchase and sale agreement for the disposition of the Corporation's two manufactured home communities (the "Manufactured Homes Communities Disposition") provides for a purchase price of approximately $40.6 million, which is to be satisfied by: (i) the assumption of mortgages with an aggregate principal balance of approximately $6.0 million; and (ii) a cash payment of approximately $34.6 million. The Manufactured Home Communities Purchase and Sale Agreement ("MHPSA") also contains customary provisions for transactions of this nature, including conditions, representations, warranties, covenants and indemnities.

The CPPSA and MHPSA are conditional upon the satisfaction of certain conditions.  The MHPSA conditions include purchaser due diligence, purchaser  board approval, and lender consents; similar conditions have already been satisfied with respect to the CPPSA.  Both agreements are conditional upon shareholder approval by a two thirds (2/3) majority vote at a duly called meeting of the shareholders of the Corporation (the "Special Meeting"). The Manufactured Homes Communities Disposition is additionally conditional on the completion of the Commercial Properties Disposition.

The board of directors of SpruceLand (the "Board") appointed a "Special Committee" of independent elected directors for the purposes of, among other things, assessing strategic alternatives, including the disposition of operating assets, considering the Commercial Properties Disposition and the Manufactured Homes Communities Disposition (the "Operating Assets Disposition"), determining whether the Operating Assets Disposition is in the best interests of the Corporation and supervising the process to be carried out by the Corporation and its professional advisors in connection with the Operating Assets Disposition, and, as the Special Committee may determine to be necessary or advisable, report and make recommendations to the Board.

The Special Committee advised the Board that, based on a number of factors, each of the Commercial Properties Disposition and the Manufactured Home Communities Disposition is in the best interests of the Corporation. As a result, the Special Committee has unanimously recommended to the Board that it recommend that shareholders vote in favour of each of the Commercial Properties Disposition and the Manufactured Home Communities Disposition at the Special Meeting. The Board has unanimously resolved to recommend that shareholders vote in favour of each of the Commercial Properties Disposition and the Manufactured Home Communities Disposition at the Special Meeting.

The Corporation anticipates calling an annual general and special meeting (the "Shareholder Meeting") on or about March 10, 2016 to consider, among other things, the Commercial Properties Disposition and the Manufactured Home Communities Disposition.

The information circular for the Shareholders Meeting will contain a detailed description of the terms and conditions of the Commercial Properties Disposition and the Manufactured Home Communities Disposition, and will be mailed to shareholders in due course, and will be available on www.sedar.com. If the Corporation's shareholders approve the Operating Asset Dispositions, it is anticipated that such transactions will be completed by the end of May 2016. The Corporation anticipates making a significant distribution to shareholders following the completion of the Operating Asset Dispositions.

Steve Cribb, President and Chief Executive Officer of SpruceLand, commented:  "After considering various strategic options for creating share value and liquidity, we believe that these transactions represent an excellent opportunity for the shareholders".

The Corporation anticipates seeking shareholder approval at the Shareholders Meeting to dissolve pursuant to the provisions of the Business Corporations Act (Alberta), and in conjunction therewith, to liquidate its other residual assets (consisting principally of three investment properties and raw land holdings), discharge its remaining liabilities and distribute its remaining property in one or more distributions to shareholders.

About SpruceLand

SpruceLand Properties Inc., formerly Spruce Land Developments Ltd. was founded with the construction of a single multi-family project in Slave Lake, Alberta in 1969. The Corporation has grown consistently and today has a diversified portfolio of revenue producing properties including office, retail and industrial buildings and manufactured home parks, in numerous communities in North, Central, and Southern Alberta, Kelowna, BC and expansion into Regina and Saskatoon, Saskatchewan. SpruceLand Properties Inc. is a Canadian controlled private corporation for tax purposes and a reporting issuer in the Province of Alberta.

Caution Regarding Forward-Looking Statements

This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the Corporation. Statements other than statements of historical fact contained in this press release may be forward-looking information. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the closing of the Commercial Properties Disposition and the expected terms and closing dates thereof; the closing of the Manufactured Home Communities Disposition and the expected terms and closing dates thereof; the making of a significant distribution following the completion of the Operating Assets Dispositions; the impact of the Operating Assets Dispositions on the Corporation's business, operations and financial performance; the liquidation of the Corporation's residual assets; the discharge of the Corporation's liabilities; the dissolution of the Corporation and distributions to shareholders in conjunction therewith; and expectations, projections or other characterizations of future events or circumstances and the future economic performance of the Corporation. The Corporation has based these forward-looking statements on its current expectations and assumptions about future events, which may prove to be incorrect.

When relying on forward looking statements to make decisions, readers are cautioned not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and do not take into account the effect of transactions or other items announced or occurring after the statements are made. All forward-looking information in this press release speaks as of the date of this press release.  A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements.  The Corporation does not undertake any obligation to to update any such forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.

SOURCE Spruceland Properties Inc.

Steve Cribb, President & CEO, 16880 - 111 Avenue, Edmonton, AB T5M 4C9, Phone: [phone] Fax: [phone], Email: [email protected]