Walton Edgemont Development Corporation Announces that its Debentures and Interest Debentures will be Converted into Class B Shares Effective September 30, 2016

CALGARY, Alberta--()--Walton Edgemont Development Corporation (the “Corporation”) announces that the Corporation has elected to exercise its right under the trust indenture (the “Indenture”) governing the Corporation’s 8% unsecured, subordinated, convertible, extendable debentures and related interest debentures (collectively, the "Debentures") to convert (the “Conversion”) all of the principal amount of the Debentures and unpaid accrued interest thereon up to September 30, 2016 into Class B non-voting common shares of the Corporation (“Class B Shares”). The Conversion is scheduled to occur effective September 30, 2016.

Pursuant to the terms of the Indenture, the directors of the Corporation have determined that, on the Conversion, holders of Debentures will receive, for each $1,000 amount of Debentures and outstanding interest (including all previously issued interest debentures) thereon, 1,187.4129 Class B Shares. Therefore, on September 30, 2016, the estimated total $32.3 million of Debentures and interest thereon outstanding will be converted into approximately 38,350,626 Class B Shares. Immediately after the completion of the Conversion, there will be a total of approximately 41,470,766 Class B Shares outstanding and no Debentures outstanding. Fractional Class B Shares will be issued on the Conversion rounded up to the nearest fourth decimal.

As each holder of Class B Shares prior to the Conversion are also debenture holders at that time based on the proportions issued by the Corporation under its original prospectus and private placement offerings, the percentage of the total number of outstanding Class B Shares held by each such shareholder immediately prior to the Conversion will not change as a result of the Conversion.

The maturity date of the Debentures is December 31, 2016. It is anticipated that there will not be sufficient funds in the Corporation to repay the Debentures. As a result, the directors of the Corporation have determined that it was appropriate to convert the Debentures effective September 30, 2016 which would otherwise have been the date that the next annual interest payment for the Debentures was due. In addition, the directors determined not to extend the maturity date of the Debentures as, given the delays in the project and the previously disclosed reduced projected returns from it, the continued accrual of interest on the Debentures would not be in the best interests of the project or the Corporation’s investors.

Based on management’s current information, the forecasted net internal rate of return (“IRR”) from the project is in the range of 3.0% to 6.0%. The Conversion will have no impact on this forecast. The forecasted IRR is based on achieving certain revenue targets, maintaining construction schedules, the timely receipt of recoveries from benefiting developments, third-party sales and commitments for additional lots from the builders. Further material changes to the IRR projection could occur due to changes in the aforementioned and other factors.

No action will be required on the part of the Debenture holders to complete the Conversion. The Conversion will be processed by the trustee of the Debentures, Computershare Trust Company of Canada and, upon issuance of the Class B Shares, the Corporation will be discharged of all of its liability for the repayment of the principal amount and unpaid interest accrued under the Debentures. Notwithstanding that no action is required on the part of Debenture holders with respect to the Conversion, the Corporation and Computershare request that Debenture holders mail the certificates evidencing their Debentures (including interest debentures) to Computershare for cancellation at the following address:

Computershare Trust Company of Canada
600, 530 – 8th Avenue SW
Calgary, Alberta T2P 3S8
Attention: Corporate Trust

Additional Information

The Corporation is managed by Walton Asset Management L.P. and the development of the Corporation’s Woodhaven project in Edmonton, Alberta is managed by Walton Development and Management LP, both of which are members of the Walton Group of Companies (“Walton”).

Walton is a multinational real estate investment, planning, and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors.

Walton has been in business for over 30 years and takes a long-term approach to land planning and development. Walton’s industry-leading expertise in real estate investment, land planning and development uniquely positions Walton to responsibly transition land into sustainable communities where people live, work and play.

Its communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Its goal is to build communities that will stand the test of time: hometowns for present and future generations.

For more information about Walton Edgemont Development Corporation, please visit www.sedar.com. For more information about Walton, visit www.Walton.com.

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This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com. Except as otherwise noted, all amounts are in Canadian dollars.

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Contacts

For media inquiries, please contact:
Walton Edgemont Development Corporation
Tony Deegan, 1-403-750-2292
tdeegan@walton.com

Contacts

For media inquiries, please contact:
Walton Edgemont Development Corporation
Tony Deegan, 1-403-750-2292
tdeegan@walton.com