WINNIPEG, Dec. 15, 2015 /CNW/ – Lanesborough Real Estate Investment Trust (“LREIT”) (TSX: LRT.UN) announced today that a special “non-cash” distribution in the estimated amount of $8.8 million (approximately $0.43452 per trust unit based on the number of trust units outstanding as of the date of this press release) has been declared payable on December 31, 2015 to the Unitholders of record on December 31, 2015. The amount of the special distribution is equal to LREIT’s estimated capital gains for 2015 reduced by the application of LREIT’s estimated operating losses for 2015 and non-capital losses carried forward from the 2014 taxation year which are available to offset the taxable portion of the capital gain. The special distribution will reduce LREIT’s taxable income for the 2015 taxation year to nil.
There being no cash available for the payment of the special distribution, payment of the whole amount shall be made, in accordance with paragraph 9.3 of LREIT’s Declaration of Trust, by the issuance of additional trust units based on the closing market price of the units on December 31, 2015. Immediately following the special distribution, the number of outstanding trust units will be consolidated so that each Unitholder will hold exactly the same number of trust units after the consolidation as each Unitholder held immediately prior to the special distribution.
LREIT recommends that Unitholders consult their own tax advisers regarding the income tax consequences of the special distribution. However, LREIT expects that a Unitholder of record on the record date of the special distribution, which Unitholder is a resident of Canada and holds trust units as capital property for Canadian income tax purposes, shall be required to include in computing its income for Canadian income tax purposes for its taxation year that includes December 31, 2015, its proportionate share of LREIT’s net taxable capital gains for the 2015 taxation year less losses which are available to offset those net taxable capital gains (estimated on the date hereof to be $4.4 million or approximately $0.21726 per trust unit). Furthermore, LREIT expects that the adjusted cost base to such a Unitholder of its trust units for Canadian income tax purposes immediately after the special distribution shall be increased by the Unitholder’s proportionate share of the special distribution. LREIT cautions that the foregoing comments are not intended and should not be construed to be legal or tax advice to any particular Unitholder.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the Toronto Stock Exchange under the symbols LRT.UN (Trust Units), LRT.DB.G (Series G Debentures) and LRT.WT.A (Warrants expiring December 23, 2015). For further information on LREIT, please visit our website at www.lreit.com.
The TSX has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
This press release contains certain statements regarding the proposed transaction described herein that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. There can be no certainty that the transaction will be completed within the timeline set forth herein or all.
SOURCE Lanesborough Real Estate Investment Trust
