Empire Company Web Site - April 22, 2008
Empire Company Limited (TSX: EMP.A) today announced that it and certain of its wholly-owned subsidiaries, including Sobey Leased Properties Limited (“SLP”), have closed the sale of 61 retail properties to Crombie Real Estate Investment Trust (“Crombie”). The properties represent approximately 3.3 million square feet of gross leasable area and consist of 40 freestanding grocery stores carrying various Sobeys banners and 21 strip plazas all of which are also anchored by Sobeys bannered grocery stores. The sale was previously announced by Empire on February 25, 2008.
The selling price in respect of the 61 properties was $428.5 million representing an effective capitalization rate of 8.12 percent before transaction costs. Empire received net cash proceeds on closing of approximately $271 million. The difference between the $428.5 million sale price and the net cash proceeds received on closing is related to funds used for the retirement of debt and for additional equity investment in Crombie, in addition to closing and transaction costs.
Empire has realized a pre-tax gain of approximately $165 million on closing of this transaction. The net cash proceeds from the transaction will be utilized by both Empire and its wholly-owned subsidiary, Sobeys Inc., to repay bank indebtedness. Immediately following this transaction, Empire indirectly has a 47.8 percent ownership interest in Crombie.
Empire is a Canadian company headquartered in Stellarton, Nova Scotia with approximately $13.8 billion in annual revenue and $5.9 billion in assets. Empire’s key businesses include food retailing and related real estate.
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