New York REIT Inc (NYSE:NYRT) and The JBG Companies will no longer have obligations towards each other. The duo has mutually agreed to immediately terminate its combination master agreement a decision that Chairman of the Board of master combination agreement Randolph C. Read says was arrived at after extensive discussions with the company’s stockholders. The Chairman further explained that the corporation was just after respecting its stockholder’s views and interests.
The termination of the master combination agreement was worth it according to JBG’s Managing Partner Matt Kelly because it would somewhat help NYRT in maximizing its long-term value. The termination may also have been occasioned by JBG’s inability to modify a transaction that would gain the shareholder’s approval. But even with all this justification, Kelly says that the investors had a different feel. Their preference would have been that of liquidation to generate near-term cash.
What next for JBG and NYRT?
Business must continue for each of them but now on different platforms. On one hand, JBG will go back to its private fund management business while on the other hand, NYRT will carry out an independent sale of its properties while returning the proceeds to investors. The company which is into real estate investment trust will also solicit new financing to buy the stake in Manhattan’s Worldwide Plaza. Adoption of strategic alternatives and plans to sell its assets is of the essence to the company.
NYRT will also be seeking a new financing which will facilitate the repayment of its existing credit facility which has an outstanding balance of $485 million. However, there is no certainty that the current credit facility will allow the proposed Refinancing plan. But in a positive remark, CEO, and president of NYRT, Michael Happel says that the company has a solid balance sheet as well as various potential transactions.
NYRT outlines its Asset Sale Plan
The company has high-quality, well-leased assets. It is one of the best in the real estate markets. Happel says that the sale of the property will take an orderly process and will also continue to comply with provisions of the existing credit facilities. The company has already engaged potential buyers who were fascinated about acquiring individual properties, and its goal is to enter into asset sale agreements.