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Melcor REIT (MR.UN-T) has announced the commencement of a strategic review process and the suspension of its monthly distributions.
The Edmonton-based investment trust is a subsidiary of Melcor Developments. Its portfolio includes interests in 38 retail, office and industrial properties in Western Canada, comprising approximately 3.15 million square feet of gross leasable area.
Its key markets are in Alberta, as well as properties in Regina, and in Kelowna, B.C.
To facilitate the strategic review, Melcor’s board of trustees has established an independent committee to consider the various options. The committee’s next step will be to retain a financial advisor; DLA Piper (Canada) LLP has been retained as legal counsel for the committee.
Retain $1.2M in cash per month
Management has not set a timeline for completion of the review, but did state in the announcement Thursday that there will be no further comment until “additional disclosure is appropriate or required”.
Suspending the distribution will allow the REIT to retain about $1.2 million in cash each month, which will improve financial flexibility and liquidity.
“The board and management will continue to monitor the REIT’s financial performance, operating environment, and strategic review process to determine an appropriate time to provide additional clarity on cash flows or to reinstate a regular cash distribution,” the announcement states.
Melcor is scheduled to release its Q4 and year-end 2023 financial results on March 5. It has a conference call and webcast scheduled for 11 a.m. ET (9 a.m. MT) on March 6.
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