TORONTO, Jan. 12, 2016 /CNW/ – Welsh Property Trust, LLC (“Welsh”) announced today that it and its subsidiary WPT Inner Park Drive, LLC (“WPT Inner Park Drive”) have redeemed a combined 6,600,000 Class B partnership units (the “Class B Units”) of WPT Industrial, LP (the “Partnership”), the operating subsidiary of WPT Industrial Real Estate Investment Trust (the “REIT”), in exchange for ownership and control over 6,600,000 trust units of the REIT (“REIT Units”). These REIT Units represent approximately 35.6% of the REIT Units issued and outstanding prior to the redemption. Welsh and WPT Inner Park Drive each redeemed 4,407,653 Class B Units and 2,192,347 Class B Units, respectively, for an equal number of REIT Units.
WPT Industrial Inc. (the “General Partner”), the general partner of the Partnership, elected to exchange the redeemed Class B Units for REIT Units in accordance with the terms of the partnership agreement of the Partnership dated April 23, 2013 and entered into by Welsh, the General Partner and the REIT (as amended, the “Partnership Agreement”). Under the Partnership Agreement, each Class B Unit is redeemable by the holder thereof for cash or Units (on a one-for-one basis subject to customary anti-dilution adjustments), as determined by the General Partner in its sole discretion. The Class B Units are economically equivalent to REIT Units and are entitled to distributions of cash from the Partnership equal to the cash distributions paid to holders of the REIT Units by the REIT.
After giving effect to this redemption and exchange, Welsh now directly and indirectly owns and controls 7,352,700 REIT Units, representing voting control over 29.3% of the issued and outstanding REIT Units. Together with its ownership of 8,625,314 Class B Units, representing 100% of the outstanding Class B Units, Welsh continues to have an effective interest in the REIT of approximately 47.3% (assuming all Class B Units are redeemed for trust units of the REIT, but otherwise on a non-diluted basis).
Welsh and its subsidiary redeemed the Class B Units to comply with the requirements of a loan agreement and the REIT Units received by Welsh in connection with the redemption will be pledged to Welsh’s lender as collateral for such loan. Welsh’s position may be increased (whether pursuant to property acquisition transactions or otherwise) or decreased in the future as considered appropriate in light of investment criteria, market conditions and other factors or circumstances and in accordance with the provisions of applicable securities legislation.
SOURCE WPT Industrial Real Estate Investment Trust