Walton Big Lake Development L.P. Announces Increase in Loan Amount from Walton Affiliate
CALGARY, Alberta--(BUSINESS WIRE)--Walton Big Lake Development L.P. (the "Partnership") and its general partner, Walton Big Lake Development Corporation (the "General Partner") announce that the board of directors of the General Partner has approved an increase in its loan amount from a Walton affiliate.
Further to the Partnership's announcement on November 30, 2012, the Partnership borrowed $5 million from an affiliate of Walton Global Investments Ltd. (the "Walton Lender") at an annual interest rate of up to 10.5%, from which the Partnership used $4,806,114.60 to make a distribution to limited partners. The additional $193,885.40 was used to pay down a portion of the Phase 1 construction loan. The amount outstanding on the loan from the Walton Lender on June 30, 2013 was $5,289,110, including principal and accrued interest.
The board of directors has approved an increase in the loan amount of $900,000 (the "Walton Loan Increase") for the purpose of paying a portion of the expenses related to construction of 215 Street in Edmonton, which provides access to the property. The remainder of the terms of the loan are unchanged. The original development plan provided for improvements to 215 Street to be carried out in Phase 2 of the Big Lake development. However, the Partnership has determined that it would be prudent to complete the improvements to 215 Street in Phase 1 to assist third-party sales efforts for single-family, multi-family and mixed-use sites in the property. The remainder of the costs to improve 215 Street, which are estimated to be approximately $9,400,000 (before recoveries to be received at a later date), are proposed to be borrowed from the current Phase 1 construction lender (the "Phase 1 Lender"). It was determined by the Partnership that it would be prudent to implement the Walton Loan Increase to facilitate the further borrowing from the Phase 1 Lender. It is anticipated that the repayment of the loan from the Walton Lender will continue to be subordinate to the repayment of the funds owing to the Phase 1 Lender.
The loan from the Walton Lender is a demand loan secured by, among other things, a second mortgage on the Partnership's property. The principal and interest thereunder (including the additional amount) will be due on December 12, 2015, with the option of the Partnership to extend that loan a further three years provided that the Partnership has not been in default of any of the terms thereof. The loan may be repaid by the Partnership prior to the due date without bonus or penalty.
The Walton Loan Increase is a "related-party transaction" under Canadian Securities Regulators Multilateral Instrument 61-101 ("MI 61-101"). The Partnership is exempt from the formal valuation requirements contained in MI 61-101 pursuant to Section 5.5(b) thereof because the Units are not listed on a stock exchange. The Partnership is exempt from the minority approval requirements contained in MI 61-101 because the board of directors of the General Partner has determined that, pursuant to Section 5.7(1)(f) of MI 61-101, the loan from the Walton Lender is on reasonable commercial terms that are not less advantageous to the Partnership than if the loan were obtained from a party dealing at arm's length with the Partnership.
The Partnership was established in September 2010 to allow limited partners to participate in the development of the Big Lake Property comprising 135.5 acres of land in Edmonton, Alberta. Marketed under the name "Hawks Ridge at Big Lake", the property is a three-phase residential development located in northwest Edmonton.
The Walton Group of Companies is a multinational group of real estate investment and development companies headquartered in Calgary, Alberta, Canada. As one of North America’s leading land-based real estate investment and development firms, its expertise is in the research, acquisition, management and development of strategically located land in major growth corridors throughout Canada and the U.S. Walton currently manages over 74,000 acres, laying the foundation for communities where people can live, work and play, and creating wealth for our clients around the globe. Since 1979, Walton has returned over $1.4 billion CAD* in client distributions.
For more information about the Walton Big Lake Development L.P., please visit www.sedar.com. For more information about Walton, visit www.Walton.com. For more information about the Hawks Ridge development, visit www.hawksridge.ca.
For media inquiries, please contact: Blair Nixon
*As of March 31, 2013, the amount returned is unaudited and consists of:
- Exit proceeds on sales of pre-development land
- Distributions, interest and principal repayment on development projects
- Interest and principal repayment on corporate bonds
This news release 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 October 2010 prospectus of the Partnership (including under the heading "Cautionary Statements") and other documents of the Partnership filed with Canadian securities regulatory authorities and available online at www.sedar.com. The forward-looking statements contained in this document are made as at the date of this news release and the Partnership does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.