Urbco negotiating $40 million deal with Northern businesses
by Jeff Colbourne
Northern News Services
NNSL (Apr 13/98) - Calgary-based Urbco Inc., one of the North's biggest publicly traded real estate companies is in the process of expanding.
Last week, Urbco announced it was negotiating the purchase of 37 separate pieces of properties located in 11 communities in the North. The value of the deal is estimated at approximately $40 million.
"We think that Yellowknife is, right now, maybe suffering a little bit from the layoffs both government and mines but I think that the future is excellent," said Donald Wilson, president and chief executive officer of Urbco.
"The diamonds are going to produce a lot of activity and the gold market will be back and government even though there's a split in the territorial government they'll have to go back up. And, Iqaluit is just gonna boom and very fast."
Most of the merger properties in are in Iqaluit. Others are in Igloolik, Gjoa Haven, Cape Dorset, Arctic Bay and Yellowknife.
These are properties that were owned by different partners and companies involving Jim Brittain of Ninety North, Iqaluit's Kenn Harper and Yellowknife's Jack Walker.
They entered into a non-binding letter of intent recently to negotiate the purchase of real estate. They hope to conclude the transaction before the end of June.
The Iqaluit hospital may be another project, said Wilson.
"If our merger goes through it would probably be a Ninety North project which would be one of our companies," he said.
With the merger, Urbco would assume roughly $25 million in outstanding debts secured against the various properties.
"We're looking at an equity of $18 million on a debt of about $26 million," said Wilson.
The purchase price remains subject to final determination based on independent appraisals but would be paid by Urbco through the issuance of 5.5 million shares at a deemed price of $3.30 a share.
Urbco constructed Yellowknife's Diamond Park and Diamond Ridge, the similarly low-priced condominium projects built in 1995 and 1996.
Another set of townhouses just constructed last year by Urbco is Diamond Pointe on Woolgar Avenue.
The company has worked in the North for 30 years, starting as Wilson Realty. It merged with Urbco in 1988. Last year, Urbco was named one of Canada's top 100 hottest companies by Profit, a magazine for Canadian entrepreneurs.
"I think that you can say that both sides are quite excited about the prospects of business and we're looking forward to it," said Wilson.
Urbco, which is currently listed on the Alberta Stock Exchange hopes to launch onto the Toronto Exchange in the near future.
