VANCOUVER, Oct. 4, 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") is under a purchase and sale
contract. The Company is awaiting confirmation from the Joint
Venture of the closing of the transaction. The property owned by
the single purpose entity was bought by the Joint Venture in 2015
(consisting of an equity investment of US $7
million), and is under contract to be sold for approximately
US $36.1 million. When
including the income received from the property over the period of
the investment, the sale should represent an estimated levered IRR
of approximately 42% to the Joint Venture.
Should the sale of this asset close, it will be very positive
for Parkit. The sale will contribute to paying down the bulk
of the 15% IRR hurdle owed to the Majority Member of OP Holdings JV
LLC. As a result, the sale should accelerate the cash flows
that the Company receives from the Joint Venture. As per the
OP Holdings JV LLC agreement, once the 15% IRR hurdle is repaid to
the Majority Member, all cash flows from refinancing and asset
sales are directed towards the PAV Member, a company co-owned by
Parkit, until the PAV Member has received a 15% IRR. The
closing of the sale is anticipated to occur on or before
October 15th. The
closing remains subject to certain conditions typical for
transactions of this nature and there is therefore no assurance
that the closing will occur on the anticipated closing date or at
all.
For more information on the Joint Venture, please refer to the
OP Holdings JV LLC.
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. 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.
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SOURCE Parkit Enterprise Inc.
