Rights Offering Provides Opportunity for Unitholders to Purchase
Additional Units, including from Funds Held In RRSPs.
/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
TORONTO, March 11 /CNW/ - Firm Capital Mortgage Investment Trust ("Firm Capital" or the "Trust") (TSX: FC.UN) announced today that all applicable securities regulatory clearances have been obtained in order for the Trust to file a circular for a rights offering (the "Offering") to raise maximum gross proceeds of $12,772,915. The Offering provides the Trust's Unitholders with the opportunity to purchase additional Units.
OFFERING RATIONALE:
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The Trust, having a large retail base of Unitholders, felt that this would be the ideal time for its existing Unitholders to have the opportunity to purchase additional Units, in a cost effective, non dilutive manner.
RRSP SEASON:
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The Trust believes that a Rights offering is ideal at the current time as it provides an opportunity for its Unitholders, many of whom are believed to have recently contributed capital to RRSP accounts, to invest these funds in the Trust.
OFFERING SUMMARY:
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Each holder of Firm Capital's trust units ("Units") as of the close of business on March 20, 2008 (the "Record Date") will be issued one right (a "Right") for each Unit held. Ten Rights, together with $10.10 (the "Exercise Price"), will entitle a Rightsholder to subscribe for one Unit at or before 4:00 pm (Toronto time) on May 1, 2008 (the "Expiry Time"). The Exercise Price represents a discount to the simple average of the closing price of the Units on each of the twenty trading days prior to the announcement of the Offering. Rights not exercised at or before the Expiry Time will be void and will have no value. Rightsholders will be entitled to subscribe for additional Units, if available, at the Exercise Price per Unit (the "Additional Subscription Privilege"). It is anticipated that, on or about March 25, 2008, a rights offering circular will be mailed to each holder of Units as of the close of business on the Record Date. Rights will be evidenced by fully transferable certificates. The TSX has conditionally approved the posting of the Rights for trading under the symbol "FC.UN.RT" and, subject to requisite filings, the Rights will begin trading on March 18, 2008. TD Securities Inc. will act as dealer manager to form a facilitating dealer group to solicit subscriptions from Unitholders.
The net proceeds of this Offering (assuming all Units are subscribed for and after payment of the estimated expenses of $390,000) will be approximately $12,382,916.
MANAGEMENT'S COMMITMENT:
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In showing their support for the Offering, certain members of the Trust's management currently intend to directly or indirectly exercise Rights including, in certain cases, under the Additional Subscription Privilege. Based on their current intentions, these individuals may, in certain circumstances (depending on, among other things, the number of Units available to be acquired under the Additional Subscription Privilege), acquire Units having a value of up to $1 million in the aggregate, representing approximately 8% of the total offering.
Certain information included in this news release contains forward-looking statements within the meaning of applicable securities laws including, among others, statements concerning the rights offering and management's commitment to the offering, as well as statements with respect to management's beliefs, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future performance and are based on our estimates and assumptions that are subject to risks and uncertainties, including that the rights offering will not be successful. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include that Unitholders will subscribe for Units under the rights offering. Except as required by applicable law, Firm Capital Mortgage Investment Trust undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For further information: Eli Dadouch, President & Chief Executive Officer, (416) 635-0221, www.firmcapital.com
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