Doug Ashbury
Northern News Services

NNSL (Jun 30/99) - Real estate and construction company Urbco Inc. is about to boost its Northern position.

Calgary-based Urbco has announced plans to acquire all of Nova Construction's assets.

Urbco recently entered a non-binding letter of intent with Nova Construction (1987) Ltd., to negotiate the purchase of all Nova's outstanding shares.

Nova Construction president Mike Mrdjenovich could not be reached for comment on Monday.

Acquiring Nova's shares means Urbco will take ownership of a portfolio of real estate assets in the NWT and Nunavut.

The portfolio includes 240 residential rental units and four commercial properties in Yellowknife, Iqaluit and four other Nunavut communities.

Many of the properties have long-term leases in place with top-level tenants, Urbco said.

Nova estimates the real estate portfolio under discussion at about $33 million.

The purchase price remains subject to final determination based on independent appraisals.

To acquire the portfolio, Urbco would offer a combination of cash, vendor take-back financing and issue about 1.39 million common shares at $3.50 a share.

Urbco would assume about $23 million of outstanding secured debt against the properties as well, the company said.

"These properties would complement Urbco's current investments within the NWT and Nunavut," Urbco said.

"The majority of the assets under discussion are located in the capitals of the two territories."

The acquisition remains subject to completion of due diligence, negotiation of final terms and the parties entering into a purchase and sale agreement as well as regulatory approval.

The deal is expected to close on Aug. 1, 1999.

Last year, Urbco acquired a 214 residential units and 13 retail or commercial properties as well as construction company Ninety North in a $40-million real estate deal.

The properties acquired in the deal include 36 parcels located in Iqaluit, Yellowknife, Pangnirtung, Arctic Bay, Gjoa Haven, Cape Dorset, Iglulik, Sachs Harbour, Taloyoak and Pond Inlet. Several of the properties are located in Iqaluit and Yellowknife. The deal also includes 10 private companies.

In Yellowknife, some of the properties are Grinnell Place, Stanton Medical Plaza beside McDonald's, and the Bowling Green building.

Yellowknifers know Urbco best for their condominium-style Diamond Pointe, Diamond Ridge and Diamond Park homes.

Among Urbco's executives are James Britton and Kenn Harper. Britton is a former GNWT deputy minister of economic development and tourism. In 1985, he left the GNWT for a career in real estate. Iqaluit-based Harper owns stores in Iqaluit and Pangnirtung.

Jack Walker and John Crichton were also involved in the deal. Walker owns the Yellowknife Inn. Crichton is NAV Canada's chief executive officer and a former First Air executive.