Urbco to buy $33 million worth of property from Nova

DWANE WILKIN
Nunatsiaq News

IQALUIT — The only publicly traded real estate development company operating in Nunavut plans to buy $33 million worth of rental properties from Nova Construction (1987) Ltd.

“I think it shows our commitment to Nunavut and the growth of Nunavut,” Urbco’s vice-president of Nunavut operations, Kenn Harper said, “and that we’re certainly here for the long haul.”

Urbco Inc. directors announced last week they have signed a letter of intent to pay Nova Construction president Mike Mrdjenovich a mixture of cash and shares for 240 residential units and four commercial properties in Iqaluit, Igloolik, Clyde River, Hall Beach, Kimmirut and Yellowknife.

Office buildings that Urbco would acquire if the deal goes through include the Department of Fisheries and Oceans building in Iqaluit and the Lahm Ridge Tower in Yellowknife.

Nova’s assets in Iqaluit include the new Northern convenience store on Apex Road, several multi-unit residential apartment buildings and residential duplexes.

The Calgary-based real estate development company first entered the Nunavut market last year, acquiring $40 million worth of commercial and residential properties from a group of vendors who included Harper and fellow businessmen Jack Walker, James Britton and John Crichton.

The most recent acquisition calls for Urbco to assume Nova’s $23 million in debt and issue 1.39 million common shares at a deemed price of $3.50 per share.

That is substantially more than the value at which shares have been trading on the Alberta Stock Exchange for the last 12 months.

“I certainly think this is a good addition to our portfolio of assets,” Harper said. “We hope it will add value to our assets.”

The final terms of the sale remain subject to due diligence and regulatory approval by the stock market.

Harper said the deal with Nova will see the total value of Urbco’s real estate rise to $120 million.

Urbco shares are thinly traded and have languished below their true value on the Alberta Stock Exchange for many months, Harper said.

The company has applied for a seat on the Toronto Stock Exchange, where it’s hoped the shares will attract the interest on institutional investors.