Toronto, Ontario--(Newsfile Corp. - December 17, 2025) - Ravelin Properties REIT (TSX: RPR.UN) ("Ravelin" or the "REIT"), an internally managed global owner and operator of well-located commercial real estate, announced today that G2S2 Capital Inc. ("G2S2 Capital") has, at the request of an independent committee of the board of trustees of the REIT, agreed to extend the forbearance period on certain loans of the REIT in the aggregate principal amount of approximately CAD$528.3 million and US$45.5 million (the "Loans") held by G2S2 Capital to March 31, 2026.
The REIT also announced that the lender with respect to the REIT's 120 South LaSalle office property in Chicago, US (the "120 South LaSalle Loan") previously completed a sale and assignment of all the indebtedness and obligations under the 120 South LaSalle Loan to G2S2, in the aggregate principal amount of approximately US$84 million. At the request of an independent committee of the board of trustees of the REIT, G2S2 has agreed to a forbearance period with respect to the 120 South LaSalle Loan, which will expire on March 31, 2026, and aligns with the extended forbearance period in respect of the Loans.
The extended forbearance period allows the REIT to continue to explore available alternatives to address its financial difficulties, including the current defaults on its existing indebtedness and its ongoing capital requirements, including to potentially raise additional debt or equity financing or to seek a restructuring of all or a portion of the REIT's outstanding indebtedness (a "Recapitalization Plan"). As part of that, the REIT, led by an independent committee of its trustees, is continuing discussions with G2S2 Capital and other lenders regarding the terms of an acceptable potential Recapitalization Plan. The REIT also expects to engage in discussions with significant holders of convertible debentures in connection with any Recapitalization Plan.
As of the date hereof, no agreement has been reached with any of the REIT's stakeholders with respect to any potential Recapitalization Plan, and there can be no assurance that the REIT will be successful in negotiating a potential Recapitalization Plan, or in raising the additional funding needed for the REIT to continue as a going concern.
Amendments to Loan Interest
In connection with the defaults on the Loans and the extended forbearance period, the REIT has agreed to an increased interest rate on the Loans of 10.0% (up from a weighted average rate of 6.44%), with a cash interest rate of 6.0% and payment-in-kind interest at a rate of 4.0%, effective as of October 1, 2025 (the "Interest Amendment").
Given that G2S2 Capital is controlled by George Armoyan and his immediate family, an insider of the REIT, the Interest Amendment is a "related party transaction" for the purposes of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators ("MI 61-101"). The material terms of the Interest Amendment are summarized above. The purpose and business reason for the Interest Amendment is for the interest rate to reflect the REIT's current financial condition and market environment, while at the same time incorporating a payment-in-kind component which allows the REIT to preserve the capital necessary for its ongoing operations. In connection with the Interest Amendment, certain restrictions under the 120 South LaSalle Loan regarding the use of cash have been removed. The REIT does not anticipate any material effect to its business and affairs beyond the preservation of capital the Interest Amendment will provide. The Interest Amendment will have no impact on the percentage of securities held by G2S2 Capital and will not impact the REIT's securities.
The REIT is relying on an exemption from the minority shareholder approval requirements available under section 5.7(1)(e) of MI 61-101 as the REIT is in serious financial difficulty, the forbearance and the reduced cash interest cost is designed to improve the REIT's financial situation, the circumstances described in section 5.5(f) of MI 61-101 are not applicable, and the terms of the Interest Amendment are reasonable for the REIT in the circumstances, all of which has been unanimously determined in good faith by the board of trustees of the REIT.
Extension of Indebtedness Waiver
The REIT previously announced the approval of a special resolution of unitholders on January 15, 2024 to amend the REIT's Declaration of Trust to remove a restriction imposed on the REIT that prevented the REIT from incurring or assuming additional indebtedness if, after giving effect to the incurrence or assumption of such indebtedness, the total indebtedness of the REIT would exceed 65% of the REIT's gross book value, including convertible debentures (the "Restriction"). The board of trustees exercised its discretion to implement the amendment in the form of a waiver of the Restriction rather than as a blanket removal of the Restriction from the Declaration of Trust (the "Waiver"), effective as at January 15, 2024, until December 31, 2025. The REIT announces that the board of trustees has further exercised its discretion to extend the effective date of the Waiver until December 31, 2026, to provide the REIT additional time to negotiate a potential Recapitalization Plan. The Restriction will be revived from and after January 1, 2027.
About Ravelin Properties REIT (TSX: RPR.UN)
The REIT owns and operates a portfolio of well-located commercial real estate assets in North America and Europe. The majority of the REIT's portfolio is comprised of government and high-quality credit tenants. Visit https://ravelinreit.com to learn more.
Forward-Looking Statements
Certain information herein constitutes "forward-looking information" as defined under Canadian securities laws which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes", or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved", or "continue" and similar expressions identify forward-looking statements. Such statements in this news release may include, without limitation, statements pertaining to any potential Recapitalization Plan; the REIT's anticipated discussions with G2S2 Capital or the holders of convertible debentures; and the revival of the Restriction. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.
Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements, including those risks and uncertainties relating to: the REIT's ability to negotiate with G2S2 Capital amendments to its existing indebtedness in order to continue as a going concern as further described under the heading "Risks and Uncertainties" in the REIT's management's discussion and analysis for the year ended December 31, 2024, available on SEDAR+ at www.sedarplus.ca under the REIT's issuer profile; and other risks and uncertainties contained in the filings of the REIT with securities regulators on SEDAR+.
For Further Information
Investor Relations
Tel: +1 647 792 6060
Email: ir@ravelinreit.com
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Source: Ravelin Properties REIT