Homburg Invest Inc. announces new strategic direction
Shares issued: Class A - 16,666,320 Class B - 3,148,739
Halifax, Nova Scotia, June 12, 2009 - Richard Homburg, Chairman and
Chief Executive Officer of Homburg Invest Inc. ("Homburg" or the
"Company") (TSX: HII.A & HII.B and NYSE Euronext Amsterdam: HII)
today announced on behalf of the Company, a new strategic direction
to focus the Company's activities exclusively on income producing
properties. Homburg Invest has appointed a special committee to
consider a plan to spin off the Company's development and other
non-income producing properties to its shareholders. As part of the
new strategic direction, the special committee will also consider a
plan to reorganize Homburg's equity structure by creating a single
class of common shares, each with a single vote and equal dividend
rights. The terms of the share reorganization proposal, including
the share exchange ratio, which will be subject to shareholder
approval, will be announced in the coming months.
Homburg also announced that no dividend will be payable in 2009. In
future years, as previously announced, the Company will declare an
annual dividend based on the Company's performance and market
conditions. Dividends will be declared in June and paid in July.
Planned initiatives
Under its new strategy, Homburg Invest will hold income-producing
properties. The Company will be a growing real estate investment
company with strong cash flows that will, subject of course to market
conditions, pay healthy annual dividends to its shareholders. Homburg
Invest will target a 50% to 60% ratio of debt to total equity. To
achieve this, as previously announced, the Company will make greater
use of strategic alliances and partnerships. The Company will
continue to be listed on both the Toronto Stock Exchange (TSX) and on
NYSE Euronext.
The new spun out entity will hold assets projected for future
development. This entity will strive to have no long-term debt.
Development projects will begin again once financial markets have
stabilized. It is anticipated that the assessment process will be
completed by autumn 2009.
Homburg will continue to issue Homburg Capital Security instruments
to raise additional capital as part of its debt management
strategy. The Homburg Capital Security A is a 9.5%, 99-year bond
that is to be listed on NYSE Amsterdam. The issue of HCSAs permits
the Company to reduce its debt-to-equity ratio, as 80% of all
outstanding HCSAs are considered equity for accounting purposes.
Homburg Invest is considering offering holders of Homburg bonds the
opportunity to exchange their holdings for HCSA.
"Our financial position is solid," said Richard Homburg. "We are
profitable and funds from operations remain healthy. These
initiatives will enable Homburg to build our cash position, further
strengthen our balance sheet and create greater certainty and
stability for our shareholders in these difficult economic times.
Under this new strategic direction, we will be in an excellent
position to build value for shareholders and to take advantage of the
best opportunities that present themselves in the months and years
ahead," Richard Homburg added.
"The creation of a single class of voting shares will benefit all our
shareholders. Indeed, we are taking this initiative because we
believe strongly that we own high quality assets, the value of which
is not reflected in our shares. We believe in the ability of markets
to discover that value."
Homburg Invest will provide more details on the various elements of
its strategic initiatives as they become available.
About Homburg Invest
Homburg Invest Inc., with its head office in Halifax, Nova Scotia,
owns and develops a diversified portfolio of quality real estate
including office, retail, industrial and residential apartment and
townhouse properties throughout Canada, the United States and Europe.
For further information, please contact:
Mr. Richard Homburg,
Chairman and CEO
Homburg Invest Inc.
Or
J. Richard Stolle
President and COO
Homburg Invest Inc.
Media inquiries:
AnnMarie Boudreau
902 222-5908
This news release may contain statements which by their nature are
forward looking and express the Company's beliefs, expectations or
intentions regarding future performance, future events or trends.
Forward looking statements are made by the Company in good faith,
given management's expectations or intentions however, they are
subject to market conditions, acquisitions, occupancy rates, capital
requirements, sources of funds, expense levels, operating performance
and other matters. Therefore, forward looking statements contain
assumptions which are subject to various factors including: unknown
risks and uncertainties: general economic conditions; local market
factors; performance of other third parties; environmental concerns;
and interest rates, any of which may cause actual results to differ
from the Company's good faith beliefs, expectations or intentions
which have been expressed in or may be implied from this news
release. Therefore, forward looking statements are not guarantees of
future performance and are subject to known and unknown risks.
Information and statements in this document, other than historical
information, should be considered forward-looking and reflect
management's current views of future events and financial performance
that involve a number of risks and uncertainties. Factors that could
cause actual results to differ materially include, but are not
limited to, the following: general economic conditions and
developments within the real estate industry, competition and the
management of growth. The Toronto Stock Exchange has neither approved
nor disapproved of the information contained herein.
This announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.