VANCOUVER, British Columbia, April 10, 2019 (GLOBE NEWSWIRE) -- Madeira Minerals Ltd. (TSX Venture/NEX-MDE.H) (“Madeira” or the “Company”), a capital pool company as defined under Policy 2.4 of the TSX Venture Exchange (the "Exchange") is pleased to announce that it has commenced steps for investments in two European real estate focused bonds, as noted below (the "Bond Investments"), with anticipated investments in the collective amount of approximately CDN$9 million.
Subject to receipt of all necessary regulatory approvals, the Bond Investments (together, the "Transactions") will collectively constitute Madeira's "Qualifying Transaction" as defined by Policy 2.4 of the Exchange (the "Qualifying Transaction") to become a Tier 2 Investment Issuer focused on the commercial real estate sector.
Concurrently with the Qualifying Transaction, the Company expects to complete a non-brokered private placement of common shares (the "Financing") for minimum gross proceeds of up to CDN$11 million at a price of CDN$0.25 per share in order to fund the Bond Investments and provide ongoing working capital. The Financing is conditional upon Exchange approval and concurrent completion of the Qualifying Transaction.
About the Bonds
The first, and smaller, of the two investments the Company proposes are Euro nominated real estate bonds, issued by Reditum S.A. a Luxembourg public limited liability company, and are traded on the Irish Stock and Frankfurt Stock Exchange (the “Reditum Bonds”). As Reditum S.A is incorporated in the Grand Duchy of Luxembourg, it files audited financials with the Luxembourg Chamber of Commerce. It has a December 31 year end. The Euro 200,000,000 bond issue bears an annual interest rate of 6.25% and interest payments are semi-annual. Upon maturity, full repayment of the principle loan amount plus accrued interest is due on July 20, 2020. Currently the issued face value of the Reditum Bonds is approximately 198,334,000 Euros. The proceeds of the bond placements are lent to a company within the Larmag Group for the purpose to acquire commercial real estate within the following criteria:
- Multi-tenant properties in and around major cities in the Netherlands and other European cities.
- Mid to High Quality Properties, with a 20-30% vacancy rate, up to 25-30 years old.
- Weighted Average Lease Expiry: ~3-4 years
- Gross yield from the properties: >9%
The second, and larger, proposed investment are Swiss Franc nominated bonds, listed on the Frankfurt Stock Exchange, issued by Nordrock Securities B.V. (the “Nordrock Bonds”). Nordrock Securities B.V. is a private company incorporated in the Netherlands and it is required to submit its audited financials to the Chamber of Commerce in Amsterdam. As the Nordrock Bonds were listed on the 25th of February this year, the first audited report will be submitted following its December 31 fiscal year end. The CHF 600,000,000 bond issue are senior secured bonds with a 4.5% fixed rate of return with final maturity on January 31, 2024. Interest is paid semi-annually, with full repayment of the principle bond amount plus accrued interest due on maturity. The first tranche of Bond issuances in the amount of CHF 50,000,000 is expected to be completed shortly. The proceeds of the issuance of these bonds will be used to acquire commercial real estate within the following criteria:
- Commercial properties in and around major cities in the Netherlands, Germany and other European cities.
- Mid to High Quality Properties, with a 30% vacancy rate cap, 80% of portfolio built no later than 1995.
- Weighted Average Lease Expiry: ~>2.5 years
- Gross yield from the properties: >=7%
The Qualifying Transaction
The Qualifying Transaction is a non-arm's length transaction subject to requisite regulatory and shareholder approval, including the approval of the Exchange. Larmag Holdings B.V. is a control person of Madeira, and currently holding 63% of Madeira’s issued and outstanding shares, and is also a control person of the above Bond issuers. Madeira will prepare a filing statement in accordance with the rules of the Exchange, outlining the terms of the Qualifying Transaction. In accordance with the rules of the Exchange, Madeira will seek shareholder approval for the Qualifying Transaction by written consent of the “majority of the minority”.
The Bond Investments are expected to be completed pursuant to the terms of a purchase/subscription agreement in regards to the Nordrock Bonds and acquisitions in the market in regards to the Reditum Bonds.
Madeira Minerals Ltd.
Madeira is a capital pool company incorporated under the Business Corporations Act (British Columbia) with its head office in Vancouver, British Columbia. Madeira is a “reporting issuer” in the provinces of British Columbia and Alberta.
Madeira currently has 19,882,220 shares issued and outstanding. Upon closing of the Qualifying Transaction and the issuance of the Financing Shares, it is anticipated that Madeira will have 63,882,220 shares issued and outstanding on an undiluted basis.
Board of Directors and Management of the Resulting Issuer
Upon completion of the Qualifying Transaction, Lars Magnusson, the principal of Larmag Holdings B.V., will join Madeira's board of directors. The following is a brief biography for the proposed new director:
Lars Magnusson – proposed Director and Chairman.
Lars Magnusson is the founder, Chairman and CEO the Larmag Group of companies that has been active in the commercial real estate sector since 1985. Over that period, he owned, developed and managed commercial holdings throughout Europe and in the U.S., with a combined value in excess of 5 billion euros.
Prior to that, he had interests in construction, purchase and sale of plant, machinery and real estate. Upon the inception of Larmag, the core focus has been on commercial real estate investment. In 1989, Mr. Magnusson lead the acquisition of 300,000 m2 of office space in New York and Chicago in the amount of USD 630 million.
Mr. Magnusson has had investment interests in oil development and production, renewable resources and other sectors. With the completion of the Qualifying Transaction, Mr. Magnusson will be joining the board as Director and Chairman.
Trading Halt
Trading in the common shares of Madeira has been halted and will remain halted pending the review of the Transactions by the Exchange. There can be no assurance that trading in the common shares of Madeira will resume prior to the completion of the Qualifying Transaction.
Sponsorship
Sponsorship of the Qualifying Transaction is required unless an exemption is available or a waiver from this requirement can be obtained in accordance with the policies of the Exchange. Madeira intends to apply for a waiver to the sponsorship requirement. There is no assurance that a waiver from this requirement will be granted.
Significant Conditions to Completion of the Proposed Transaction
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to: (a) closing of the Financing and closing conditions customary to transactions of the nature of the Transactions; (b) approvals of all regulatory bodies having jurisdiction in connection with the Qualifying Transaction; and (c) Exchange regulatory approval. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
For further information, please contact:
Thomas Kovacs
Chief Executive Officer, President and Director
Madeira Minerals Ltd.
Telephone: +1 604 924 8000
Email: info.madeira.minerals@gmail.com
Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this news release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements relating to the Qualifying Transaction, including statements regarding the receipt of all necessary regulatory and other approvals and satisfaction of all other closing conditions in connection with the Qualifying Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Qualifying Transaction will not be completed or that the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Qualifying Transaction will not be satisfied; the risk that closing of the Qualifying Transaction could be delayed if Madeira is not able to obtain the necessary approvals on the timelines planned, the timing of obtaining required approvals, closing conditions for the Qualifying Transaction, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of Madeira.
The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, Madeira disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Madeira undertakes no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.