First Capital Realty calls C$97.5 million of 7.875% convertibles

Pittsburgh, July 22 - First Capital Realty Inc. will redeem all C$97.5 million of its outstanding 7.875% convertible unsecured subordinated debentures for cash and accrued interest on Aug. 30, according to a company news release.

Holders of the debentures can convert them into common shares at a conversion price of C$16.43, subject to the terms and conditions of the indenture.

First Capital Realty stock closed at C$16.50 on Wednesday.

Canadian subsidiaries of Gazit-Globe (1982) Ltd. and Alony-Hetz Properties & Investments Ltd. said they will convert their $39.7 million and $11.1 million of convertibles, respectively, prior to the redemption date, according to the release.

Gazit and Alony-Hetz, through Canadian subsidiaries, also agreed to subscribe for 2 million common shares in a private placement at a price of C$16.00 per share, subject to regulatory approval.

The private placement proceeds of $32 million along with the company's credit facilities will be used to fund the redemption.

"Given the 7.875% coupon and as the dilution from the series B debentures is already fully reflected in our numbers, this is an opportune time for First Capital to call them for redemption," chief financial officer Karen H. Weaver said in the release. "We are also pleased that our two major shareholders intend to convert their debentures into common shares and further increase their investment in the company through the private placement, an important vote of confidence in our future growth."

First Capital Realty is a Toronto owner and developer of neighborhood and community shopping centers located predominantly in growing Canadian metropolitan areas.

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