Temple Real Estate Investment Trust announced Tuesday that it plans to convert to a corporate structure operating under the new name Temple Hotels Inc.
The REIT says it is making the change because the nature of its assets and operations means it does not currently qualify for the so-call “REIT exception” under the federal tax code.
“As a result, continuing as a trust does not provide any meaningful long-term benefits to the REIT or its security holders,” the company said in a release.
Under the proposed changes, unitholders will receive one common share in the new company in exchange for each unit held, while holders of options will receive options to acquire common shares of Temple Hotels which provide for the same vesting provisions, exercise prices and expiry dates.
Holders of convertible debentures will be entitled to convert such convertible debentures into common shares on the same terms and conditions as at present.
No changes to the board or senior management is contemplated nor will there be any change to the amount and frequency of the current monthly distribution policy, Temple said.
A unitholders meeting is expected to be held in October to vote on the proposal.
Temple owns a number of hotels in Alberta, Saskatchewan, British Columbia and the Northwest Territories.