TSE SYMBOL: BEI NYSE SYMBOL: BEI November 6, 2003
Boardwalk’s Board Considers Conversion To A Real Estate Investment Trust
Calgary, Alberta
BOARDWALK EQUITIES INC. (“BEI”) has recently engaged
CIBC World Markets, Deloitte & Touche LLP, PricewaterhouseCoopers LLP
and Stikeman Elliott LLP to advise the Corporation on the
reorganization of the Corporation as a Real Estate Investment Trust.
At a meeting held on November 5, 2003, the Board of Directors of BEI
reviewed the proposal for the reorganization and concluded that the
proposal had the potential to increase shareholder value.
The Board of Directors determined to form a Special Committee of
Independent Board members to ensure that the reorganization is
fair to all shareholders.
Management anticipates a further press release in the near future
outlining the effects of the proposed reorganization once annual
budgeting is completed and various technical aspects
of the reorganization are reviewed.
As previously disclosed, the Company will be holding it’s normal
third quarter financial results conference call on
November 17th, 2003, and at this time an update on this process
will be provided.
Reasons for Consideration of Reorganization
Some of the reasons offered for reorganizing Boardwalk’s
entire portfolio to a REIT are:
a) Monthly cash distributions are anticipated to provide an
attractive return to Unitholders without impairing
Boardwalk’s ability to finance capital expenditures
and to repay external debt;
b) The Company’s diversified portfolio of multi-family
rental properties provides a relatively stable
cash flow which is well suited for a REIT structure;
c) Boardwalk REIT involves a trust structure which
will result in a higher level of cash distributions
than would be available under the existing
corporate structure of BEI;
d) A significant portion of Boardwalk REIT’s distribution
to Unitholders will be tax deferred;
e) It is anticipated that the reorganization will provide
Boardwalk REIT with greater access to the public capital
markets to fund growth initiatives than is or would be
available to BEI under current market conditions;
f) Boardwalk REIT would be the largest and most
geographically diverse publicly traded
multi-family trust in Canada.
This reorganization is subject to shareholder and regulatory
approval, as well as final approval by the Board of Directors
of BEI. Various consents of the Corporation’s lenders are
also necessary. There is no certainty at this time that
the reorganization will be implemented.
In addition to continuing the normal course distribution of
common shares during this process, Messrs. Sam and Van Kolias,
prior to the conversion to a REIT, may divest a significant
portion of their current holdings for tax and structural
considerations. Messrs. Sam and Van Kolias will continue
to hold a material interest in the proposed REIT.
Corporate Profile
Boardwalk Equities Inc. is Canada’s largest owner/operator of
multi-family rental communities. Boardwalk currently owns and
operates in excess of 250 properties with over 31,200 units
totaling approximately 26 million net rentable square feet.
The Company’s portfolio is concentrated in the provinces of
Alberta, Saskatchewan, Ontario and Quebec. Boardwalk is
headquartered in Calgary and its shares are listed on both the
Toronto Stock Exchange and the New York Stock Exchange
and trade under the symbol BEI. The Company has a total
market capitalization of approximately $2.2 billion.
Forward-Looking Statements
This release contains forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995.
The forward-looking statements are statements that involve risks
and uncertainties, including, but not limited to, changes in the
demand for apartment and town home rentals, the effects of
economic conditions, the impact of competition and competitive
pricing, the effects of the Company's accounting policies and
other matters detailed in the Company's filings with Canadian
and United States securities regulators available on SEDAR in
Canada and by request through the Securities and Exchange
Commission in the United States, including matters set forth
in the Company's Annual Report to Shareholders under the heading
"Management's Discussion and Analysis".
Because of these risks and uncertainties, the results,
expectations, achievements, or performance described in
this release may be different from those currently
anticipated by the Company.
For further information please contact:
Boardwalk Equities Inc.
Sam Kolias,
President and CEO,
(403) 531-9255;
Roberto Geremia,
Senior Vice President,
Finance and Chief Financial Officer,
(403) 531-9255;
Mike Hough,
Senior Vice President,
(416) 364-0849;
Paul Moon,
Director of Corporate Communications,
(403) 206-6808
