Plazacorp Announces $27.7 Million Bought Deal Public Offering of Common Shares

Sep 7, 2011


FREDERICTON, NB, Sept. 7, 2011 /CNW/ - Plazacorp Retail Properties Ltd. ("Plazacorp" or the "Company") (TSXV: PLZ) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets, under which the syndicate will purchase on a bought-deal basis and subject to regulatory approval, 6,600,000 common shares of Plazacorp issued from treasury at a price of $4.20 per share.  The gross proceeds from the offering are $27,720,000.

Plazacorp has granted the Underwriters an over-allotment option (the "Over-Allotment Option"), exercisable in whole or in part up to 30 days after Closing, to purchase up to an additional 990,000 common shares to cover over-allotments, if any.  Any common shares issued subject to the Over-Allotment Option will be issued by Plazacorp from treasury.

Plazacorp will, within the next few days, file with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, a preliminary short form prospectus relating to the issuance of the shares.  Closing of the offering is expected to take place on or about September 27, 2011.

Plazacorp intends to use the net proceeds from the offering as follows:

  (i)      to repay near-term indebtedness, comprising of $6.9 million outstanding on the Company's Series III Mortgage Bonds which mature on September 30, 2011, $1.5 million of Promissory Notes outstanding to related parties and between $6 and $8 million outstanding on the Company's operating line of credit;
  (ii)      to fund the repayment of the $3 million outstanding on the Company's Series IV Mortgage Bonds which mature on June 30, 2012;
  (iii)      to fund between $8 and $9 million of equity for the Company's future development and re-development activities, with such amounts expected to be deployed during the 12 to 18 months following the closing of the offering; and
  (iv)      the remainder, if any, for general corporate purposes.

"We are pleased to be completing our first public equity raise after 12 years of successfully raising equity via private placements", commented Michael Zakuta, President and CEO of Plazacorp.  "In addition to de-levering the company to approximately 54% debt-to-gross book value (or approximately 48% assuming the well-in-the-money convertible debentures are excluded), a portion of the proceeds from this offering will be used to fund various projects in our development pipeline, which has served as the primary source of accretive growth for Plazacorp since the company's inception.  Earl Brewer (Chairman of Plazacorp's Board of Directors) and I continue to be fully committed to Plazacorp as we will continue to hold 31% (27% on a fully-diluted basis) of the outstanding shares after this Offering.  Furthermore, we believe that this public offering will serve to enhance liquidity in the Company's shares, which we believe will be beneficial to all shareholders."

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.  The securities being offered have not been and will not be registered under the U.S. Securities Act of 1933 as amended and may not be offered or sold in the United States absent registration or pursuant to applicable exemption from registration.

Plazacorp was incorporated on February 2, 1999 and commenced trading on the TSX Venture Exchange on July 30, 1999.  Headquartered in Fredericton, New Brunswick, Plazacorp acquires, develops and redevelops unenclosed and enclosed retail real estate throughout Atlantic Canada, Quebec and Ontario, which are predominantly occupied by national tenants (approximately 90% of the total).  The Company's portfolio at June 30, 2011 includes interests in 112 properties totaling over 5.1 million square feet and additional lands held for development.  These include properties directly held by Plazacorp, its subsidiaries and through joint ventures.  Plazacorp's growth has been primarily generated through the development or redevelopment of retail properties.  Plazacorp currently owns interests in nine projects under development and four land assemblies in progress which, upon completion, are expected to add an additional 591,000 square feet (at the Company's ownership percentage) and are expected to be accretive to the Company's earnings.  Plazacorp has a proven history of dividend growth, having increased its common share dividend nine times over the past nine years, representing a compounded annual growth rate of approximately 13% over this period.

Plazacorp intends to focus its investments on retail real estate in Canada and expects that unenclosed single tenant and multi tenant retail centres in primary, secondary or tertiary markets in Central and Eastern Canada will constitute the majority of its acquisition and development activity over the near to medium term.  Subject to appropriate regulatory, board and shareholder approvals, as applicable, the Company is considering the possibility of converting from a mutual fund corporation to a real estate investment trust (REIT) structure and pursuing a listing on the TSX.

All statements in this press release that do not relate to historical facts constitute forward-looking statements.  These statements represent Plazacorp's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements.  These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


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Or contact: Michael Zakuta at (514) 457-0997 or Floriana Cipollone at (416) 848-4583