VANCOUVER, Aug. 13, 2018 /CNW/ - Parkit Enterprise Inc.
("Parkit" or the "Company") (TSXV: PKT; OTCQX: PKTEF)
announces that one of the single purpose entities held by OP
Holdings JV LLC (the "Joint Venture") has sold Terra Park, its parking facility located in
Jacksonville, Florida.
Terra Park was bought by the Joint
Venture in 2015 for US$6.4 million
(consisting of an equity investment of US $2.4 million), and was sold for US $6.83 million plus an additional sum of US
$750,000 paid in equal monthly
installments over one year. When including the income
received from the property over the period the investment was held,
the sale represents an estimated levered IRR of approximately 24%
to the Joint Venture.
The sale of this asset is positive for Parkit because the
Company believes it accelerates the cash flows that the Company
should receive from the Joint Venture. Parkit understands
that all of the net proceeds from the sale of Terra Park are to be
used to satisfy the 15% preferred return of the majority member, OP
Holdings JV Member LLC, an affiliate of Oz Real Estate, bringing
Parkit closer to fulfilling the majority member's 15% IRR hurdle
and thus accelerates the timing of future cash flows to be received
by Parkit.
About PARKIT
Parkit Enterprise Inc. is engaged in the acquisition,
optimization and asset management of income producing parking
facilities across the United
States. The Company's shares are listed on TSX-V (Symbol:
PKT) and on the OTCQX (Symbol: PKTEF).
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Certain statements in this release are forward-looking
statements. Forward-looking statements consist of statements that
are not purely historical, including any statements regarding
beliefs, plans, expectations or intentions regarding the
future. Forward-looking statements in this Press Release
include those concerning the Company's anticipation that the sale
of Terra Park represents an estimated levered IRR of approximately
24% to the Joint Venture, the belief that it will accelerate cash
flows to the Company from the Joint Venture and the projected use
of the net proceeds from the sale. Such statements are subject to
risks and uncertainties that may cause actual results, performance
or developments to differ materially from those contained in the
statements. No assurance can be given that any of the events
anticipated by the forward-looking statements will occur or, if
they do occur, what benefits the Company will obtain from them, if
any.
NON-GAAP FINANCIAL MEASURES
This release contains a non-GAAP financial measure. The
definition and calculation of this non-GAAP financial measure may
differ from the definitions and methodologies used by other
companies and, accordingly, may not be comparable. The non-GAAP
financial measure referred to below should not be considered an
alternative to net income as an indication of our performance. In
addition, this non-GAAP financial measure does not represent cash
generated from operating activities in accordance with GAAP and
therefore should not be considered as an alternative measure of
liquidity or as indicative of cash available to fund cash
needs.
Levered Internal Rate of Return ("IRR") is calculated as the
internal rate of return on the Joint Venture's equity investment in
the property considering the timing and amounts of capital
contributions paid, and all distributions received.
Management believes that the levered IRR achieved during the
period a property is owned by the Joint Venture is useful because
it is one indication of the gross value created by the Joint
Venture's acquisition, management and ultimate sale of a property,
before the impact of Joint Venture's overhead and taxes. However,
leveraged IRR is not a substitute for net income as a measure of
our performance.
The levered IRR achieved on the property as cited in this
release should not be viewed as an indication of the gross value
created with respect to other properties owned by the Joint
Venture, and the Company does not represent that the Joint Venture
will achieve similar levered IRRs upon the disposition of other
properties. The levered IRR cited in this press release is
from the perspective of the Joint Venture, in which the Company has
an economic interest.
Under GAAP, the Company recognizes its investment in the Joint
Venture using the equity method whereby the carrying value of the
investment is adjusted for the Company's share of the profit and
loss of the Joint Venture, and decreased for any distributions
received by the Joint Venture. All amounts reported by the
Company from the Joint Venture are translated into Canadian
dollars. The gain on the disposition of the property will
have an impact on the amount reported by the Company for its share
of the GAAP net profit from the Joint Venture. However, under
the terms of the Joint Venture agreement, the Company does not
expect to receive any capital distributions at this time from the
Joint Venture arising from this property disposition.
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SOURCE Parkit Enterprise Inc.
