TORONTO, Sept. 19 /CNW/ – H&R Real Estate Investment Trust (the “REIT”)
(TSX: HR.UN) announced today that the REIT’s unitholders approved an internal
organization (the “Reorganization”) of the REIT which was previously announced
by the REIT in its May 16, 2008 Press Release. The Reorganization was approved
by 99.8% of the votes cast in person or by proxy by the REIT’s unitholders at
the special meeting.
The Reorganization would result in the following:
(i) the completion of certain transactions in the course of which each
unitholder would receive, for each REIT unit held, a unit of a
“sister” trust (“H&R Finance Trust”). Thereafter, each issued and
outstanding REIT unit would trade together with a unit of H&R
Finance Trust as a “Stapled Unit”; and
(ii) the completion of certain transactions whereby H&R TT (LP) Inc., a
wholly-owned subsidiary of the REIT, would ultimately transfer all
of its assets (which primarily consist of an interest in a
partnership that holds the Telus Tower in Calgary, Alberta) to the
REIT.
The Reorganization will require the approval of the Court of Queen’s
Bench of Alberta, and the REIT has scheduled such approval for September 26,
2008. Subject to the Court’s approval, the REIT anticipates that the effective
date of the Reorganization will be October 1, 2008.
As described in more detail in the management information circular of the
REIT dated August 20, 2008, Part XIII.2 of the Income Tax Act (Canada) (the
“Tax Act”) imposes a tax on each holder of REIT units that is neither a person
resident in Canada for purposes of the Tax Act nor a “Canadian partnership”
for purposes of the Tax Act (a “Non-Resident Holder”) equal to 15% of the fair
market value of the units of H&R Finance Trust at the time of their
distribution. It is anticipated that each unit of H&R Finance Trust will have
a fair market value of approximately $0.91 on October 1, 2008, being the
effective date of the Reorganization, and therefore Part XIII.2 non-resident
withholding tax of approximately $0.14 is required to be withheld in respect
of each unit of H&R Finance Trust distributed to Non-Resident Holders.
Non-Resident Holders are encouraged to consult their broker or investment
adviser with regard to arrangements for remittance of any applicable Part
XIII.2 non-resident withholding tax. On the effective date of the
Reorganization the REIT will issue a press release (which will be made
available on its website at www.hr-reit.com) disclosing the amount of
non-resident withholding tax payable by Non-Resident Holders per Finance Trust
Unit distributed. Unitholders are encouraged to review the management
information circular of the REIT dated August 20, 2008 in detail for more
information.
About H&R REIT
The REIT is a TSX-listed, open-ended real estate investment trust, which
owns a North American portfolio of 34 office, 124 industrial and 129 retail
properties comprising 43 million square feet, with a net book value of
$4.4 billion. The foundation of the REIT’s success is a disciplined strategy
that leads to consistent and profitable growth.
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