The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Northern Property Real Estate Investment Trust Announces Completion of Plan of Arrangement

Thursday, January 06, 2011

Northern Property Real Estate Investment Trust Announces Completion of Plan of Arrangement19:17 EST Thursday, January 06, 2011CALGARY, ALBERTA--(Marketwire - Jan. 6, 2011) - Northern Property Real Estate Investment Trust ("NPR") (TSX:NPR.UN) announced today that its previously announced plan of arrangement (the "Arrangement"), which was approved by unitholders at a special meeting on November 25, 2010, has been successfully completed. NPR completed the Arrangement to ensure it meets the definition of a Real Estate Investment Trust ("REIT") as defined in the Income Tax Act (Canada) (the "Tax Act"). The December 16, 2010 announcement by the Minister of Finance of policy changes respecting the REIT exemption did not address all of the factors which led NPR to proceed with the Arrangement.The Arrangement has resulted in the following:the completion of certain transactions whereby a new taxpaying Alberta corporation, known as NorSerCo Inc. ("NorSerCo"), was created to hold those business assets of NPR which produce revenues that do not meet the REIT criteria under the Tax Act ("Non-Qualifying Revenue"). NPR's only assets which produce Non-Qualifying Revenue are the day-to-day business operations associated with NPR's four ExecuSuite properties; and the completion of these transactions that resulted in each NPR unitholder receiving one common share of NorSerCo for each NPR unit held immediately prior to the completion of the Arrangement. The NPR units and NorSerCo common shares are listed on the Toronto Stock Exchange together as "Stapled Units" under the trading symbol "NPR.UN". As described in more detail in NPR's Management Information Circular dated November 1, 2010 (the "Circular"), holders of NPR Units who are not resident in Canada ("Non-Resident NPR Unitholders") for the purposes of the Tax Act are subject to a 15% Canadian withholding tax ("Part XIII.2 Tax") on the value of certain securities distributed or deemed to be distributed to them in the course of the Arrangement. It is estimated that the aggregate value of the securities distributed or deemed to be distributed on each NPR Unit is $0.3568 and therefore Part XIII.2 Tax of approximately $0.0535 is payable by Non-Resident NPR Unitholders in respect of the securities distributed or deemed to be distributed to them on each of their NPR Units. Non-Resident NPR Unitholders are encouraged to consult their broker or investment advisor with regard to arrangements for payment of this Part XIII.2.Unitholders are encouraged to review in detail the Circular for more information.ABOUT NPRNPR is a real estate investment trust specializing primarily in residential rental properties. It is the largest residential landlord in the Northwest Territories, Nunavut and Newfoundland and Labrador and has an increasing presence in key growth markets in northern Alberta and British Columbia.FOR FURTHER INFORMATION PLEASE CONTACT: Mr. Todd R. CookNorthern Property Real Estate Investment TrustChief Financial Officer(403) 531-0720