TORONTO, ON–(Marketwired – October 23, 2015) – Delavaco Residential Properties Corp. (“Delavaco” or the “Company”) (TSX VENTURE: DVO.U) is pleased to provide the following update.
Sale of Single Family Home Portfolio and Debt Repayment
The Company continues to sell its single-family home portfolio. To date, the Company has sold 120 single-family homes in Florida and has 24 homes pending sale with executed contracts in place. The Company continues to divest itself of its single-family home portfolio in Florida, Georgia and New Jersey while using proceeds therefrom to pay down its corporate debt facilities. The Company has now paid down $7.5M of the $25M original principal amount representing 30% of the debt, with the most recent principal payment being made on October 5, 2015. The Company remains confident that the sale of the single-family home portfolio accompanied by the pay down of debt shall strengthen its balance sheet’s leverage profile while increasing operating income by eliminating the costs associated with operations of the single-family home portfolio. These early payments will result in an annual interest reduction of $562,500.
Changes to the Board of Directors
The Company would like to announce that Kelly Hanczyk and Marc Muzzo have resigned from the Board of Directors. The Company would like to express its sincere thanks to Messrs. Hanczyk and Muzzo for their contributions to the Company.
Municipal Code Violations:
The Company would like to provide this update in respect to the notices of fines and penalties relating to liens placed by municipal authorities. Since June 30, 2015, when the total of such fines were estimated at approximately $8,129,654, the Company has successfully settled approximately $382,930 of these fines and penalties at a cost of approximately $44,983. The Company continues to estimate the settlement of all fines and penalties at 4% to 5% based on continued discussions with our advisors who specialize in the area of code violations. Those fines and penalties settled since June 30, 2015 are not representative of the total estimated cost as they are in particular counties making up a smaller population of the affected homes. The Company has taken actions to remove and discharge liens of approximately $6.5M and awaits settlement of such liens while the balance of these liens continue to be actively addressed. The Company’s Interim Chief Operating Officer has developed policies to mitigate further exposure and has accelerated the rate at which this liability is being managed.
General and Administrative Costs:
The Board continues to work to minimize the cash burn of the Company. To date the Company has closed its Toronto office and moved its Florida office to its multi family property where it shares space and incurs incremental costs associated with its team without the cost of rent, and eliminated two administrative roles. The Company has also delisted itself from the OTCQX as an additional measure to reduce costs. These reductions will save the Company approximately $320,000 annually.
About Delavaco Residential Properties Corp.
Delavaco Residential Properties Corp. was formed on January 27, 2011 to take advantage of the U.S. housing crisis with the goal of significant capital appreciation through the recovery of the housing sector. Now a public company, Delavaco has its shares listed for trading on the TSX Venture Exchange. Delavaco is focused on the ownership and management of single and multi-family residential properties located principally in the south-eastern United States. Delavaco’s real estate portfolio consists of single-family homes in Florida, Georgia and New Jersey, and multi-family units in Florida and Texas.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: Certain information in this news release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “intend” and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect to Delavaco’s intended acquisition focus. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse industry events; marketing costs; loss of markets; volatility of real estate prices; inability to access sufficient capital from internal and external sources, and/or inability to access sufficient capital on favourable terms; industry and government regulation; changes in legislation, income tax and regulatory matters; the ability of Delavaco to implement its business strategies; competition; currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Neither the 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.