Doug Ashbury
Northern News Services

NNSL (July 05/99) - Real estate and construction company Urbco Inc. will acquire $33 million worth of real estate assets from Yellowknife-based Nova Construction (1987) Ltd., it was announced Thursday.

Calgary-based Urbco recently entered a non-binding letter of intent with Nova to negotiate the purchase of all Nova's outstanding shares.

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

Nova president Mike Mrdjenovich, who will end up owning about 10 per cent of Urbco's stock in the deal and probably gain a seat on the company's board of directors, could not be reached for comment.

The portfolio includes 240 residential rental units and four commercial properties located in Iqaluit, Clyde River, Iglulik, Hall Beach, Kimmirut and Yellowknife. Most of the properties are in Iqaluit.

Among the real estate to be acquired in Nunavut's capital is the Fisheries and Oceans building and various apartment complexes.

Among the Yellowknife properties is the Lahm Ridge Tower, as well as Niven Lake, Lanky Court and Dorset apartment complexes.

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

"This (deal) will push Urbco's (Northern) assets over $100 million," Urbco president James Britton said.

Prior to the Nova deal, Urbco's total assets are estimated at $100 million.

To acquire the Nova portfolio, public-company Urbco will offer a combination of cash, vendor take-back financing and issue about 1.39 million common shares at $3.50 a share and Urbco would assume about $23 million of outstanding secured debt against the properties. Purchase price remains subject to final determination based on independent appraisals.

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

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 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 that 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 were located in Iqaluit and Yellowknife. The deal also includes 10 private companies.

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