TORONTO, November 23, 2020: Trez Capital Senior Mortgage Investment Corporation (TSX:TZS) (the “Company”) announced today the renewal of a mortgage with a principal amount of approximately $27.7 million (of which the Company’s portion is approximately $14.7 million), which is the more significant of the two remaining mortgages in its portfolio, for a period of two years expiring on December 1, 2022 (the “Mortgage Renewal”).
Under the terms of the Mortgage Renewal, the borrower has agreed to pay down approximately $4.9 million on each of December 1, 2020 and December 1, 2021, of which approximately $3.9 million will be paid to the Company on each repayment date. Interest will continue to accrue on the Company’s portion of the mortgage.
The Company and Trez Capital Fund Management Limited Partnership (the “Manager”) also announced today that they have agreed to terminate their existing management agreement (as amended, the “Management Agreement”) pursuant to which the Manager has performed management services for the Company since 2012.
Under the terms of a separation and mutual release agreement dated November 23, 2020 (the “Separation Agreement”), the Management Agreement will terminate on December 31, 2020 or such earlier date as the Company provides notice that a successor manager has been appointed (the “Termination Date”). Under the Separation Agreement, the Manager will be entitled to be paid a one-time separation fee of $200,000 on termination of the Management Agreement and, except for accrued management fees, will not be entitled to any other fees under the Management Agreement, including any incentive fees and early termination fees.
The Manager has agreed to provide full support and transition services to the Company and to any successor manager appointed by the Company for a period of 60 days from termination of the Management Agreement. The Company’s board of directors anticipates a smooth and timely transition of all functions necessary to continue the orderly wind-up of the Company following termination, pursuant to the transition plan specified in the Separation Agreement.
In connection with the Separation Agreement, Alexander Manson and Clint Matthews have agreed to resign from their respective roles as Chief Executive Officer and Chief Financial Officer of the Company, effective on the Termination Date. In addition, the Company has also agreed to seek shareholder approval to change its name to a name that does not include the words “Trez” or “Trez Capital” at an annual and special meeting of shareholders to be held following the filing of the Company’s annual audited financial statements for the year ended December 31, 2020.
About the Company
On June 16, 2016, the Shareholders of the Company approved the orderly wind-up of the Company. Under the orderly wind-up plan the Company will distribute the net proceeds through special distributions, the repurchase of shares pursuant to the normal course issuer bid, or otherwise.
Forward Looking Statements
Certain statements in this news release about the Company and its business, operations, investments and strategies, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, "forward looking statements"). The forward-looking statements are stated as of the date of this news release and are based on estimates and assumptions made by the Manager in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Manager believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Past performance is not an indication of future returns, and there can be no guarantee that targeted returns or yields can be achieved. The Manager refers you to the Company's public disclosure for information regarding these forward-looking statements, including the assumptions made in preparing forward-looking statements and management's expectations, and the risk factors that could cause the Company's actual results, yield, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. Such public disclosure is available on SEDAR and at the request of the Manager. This news release does not represent an offer or solicitation to sell securities of the Company.
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