KILLAM APARTMENT REIT ANNOUNCES INTERNAL REORGANIZATION TO SIMPLIFY ITS ORGANIZATIONAL STRUCTURE

HALIFAX, NS, Oct. 15, 2024 /CNW/ - Killam Apartment REIT (TSX: KMP.UN) ("Killam" or the "REIT") is pleased to announce that its Board of Trustees has unanimously approved a proposed internal reorganization that will be accomplished by way of a plan of arrangement (the "Arrangement"). The Arrangement will be subject to unitholder approval at a special meeting of Killam to be held on November 21, 2024 (the "Meeting").

The Arrangement will simplify Killam's organizational structure by eliminating Killam Properties Inc. ("KPI"), a wholly-owned subsidiary of the REIT, so that Killam Apartment Limited Partnership will hold its entire investment in Killam Apartment Subsidiary Limited Partnership ("Killam SLP") directly, rather than partially through KPI.  In the existing structure, KPI is allocated its share of income and capital gains as a partner of Killam SLP. The Arrangement is expected to reduce or eliminate potential corporate taxation in respect of income and capital gains allocated to KPI, thereby increasing future cash flow for distribution to the REIT. The Arrangement is also expected to reduce the complexity of accounting and legal reporting and of income tax compliance inherent in Killam's existing structure. The REIT has received an advance income tax ruling of the Canada Revenue Agency in connection with the Arrangement.

The proposed Arrangement will not result in a change to Killam's strategy, portfolio or operations. After completing the Arrangement, unitholders will continue to hold the same number, type and percentage of outstanding units as they held immediately before the Arrangement and the total number of units outstanding immediately following the Arrangement will be the same as before. The REIT's trust units ("Trust Units") will continue to be listed on the TSX and retain the same CUSIP number.

The Arrangement will be effected pursuant to a plan of arrangement under the Canada Business Corporations Act and is subject to the approval of 66⅔% of the votes cast by holders of the Trust Units and special voting units of the REIT (the "Special Voting Units"), voting together as a single class (Special Voting Units are associated with Class B limited partnership units of Killam Apartment Limited Partnership ("Exchangeable Units"), which is controlled by the REIT. The Exchangeable Units are intended to be economically equivalent to and exchangeable for Trust Units on a one-for-one basis and are accompanied by Special Voting Units of the REIT that provide their holders with equivalent voting rights to holders of Trust Units). Trustees and officers of Killam, who control collectively 3.72% of Killam's Trust Units and Special Voting Units, have indicated their intention to vote in favour of the Arrangement. In addition to the requirement for unitholder approval, the completion of the Arrangement will be contingent on all necessary third party, court and regulatory approvals, including the approval of the Toronto Stock Exchange.

Unitholders who vote in favour of the Arrangement at the Meeting will also be authorizing and approving the adoption of an Amended and Restated Declaration of Trust of the REIT, which includes amendments to the REIT's current governing Declaration of Trust necessary to effect the Arrangement and other amendments of a minor, housekeeping or clerical nature that are not prejudicial to the Unitholders.

Further details on the Arrangement will be set out in an information circular (the "Circular") expected to be filed on SEDAR+ at sedarplus.ca and mailed to unitholders on or about October 24, 2024, in advance of the Meeting. Although the timing of the completion of the Arrangement cannot be predicted with certainty, management anticipates the Arrangement to become effective on November 30, 2024.

About Killam Apartment REIT

Killam Apartment REIT, based in Halifax, Nova Scotia, is one of Canada's largest residential real estate investment trusts, owning, operating, and developing a $5.3 billion portfolio of apartments and manufactured home communities. Killam's strategy to drive value and profitability focuses on three priorities: (1) increase earnings from the existing portfolio; (2) expand the portfolio and diversify geographically through accretive acquisitions, targeting newer properties and dispositions of non-core assets; and (3) develop high-quality properties in its core markets.

For information, please contact:

Claire Hawksworth, CPA
Senior Manager, Investor Relations
[e-mail]
[phone]              

Note: The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. Certain statements in this press release may constitute forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "believe," "continue," "remain," or the negative of these terms or other comparable terminology, and by discussions of strategies that involve risks and uncertainties. Such forward-looking statements may include, among other things, statements regarding: the Arrangement and the timing and benefits thereof; the Meeting and the timing thereof; the effect of the Arrangement on holders of Trust Units and Special Voting Units; the approvals required for the completion of the Arrangement; the adoption of an Amended and Restated Declaration of Trust and the terms thereof; the contents, mailing, and availability of the Circular and the timing thereof; and Killam's priorities.

Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated or implied, or those suggested by any forward-looking statements, including: Killam's ability obtain the necessary regulatory and third-party approvals, including, among others, court, unitholder and Toronto Stock Exchange approval; risks related to tax legislation and the interpretation and application thereof; the effects and duration of local, international and global events, any government responses thereto and the effectiveness of measures intended to mitigate any impacts thereof; competition; legislation and the interpretation and enforcement thereof; litigation to which Killam may be subject; global, national and regional economic conditions (including  interest rates and inflation); and the availability of capital to fund further investments in Killam's business. For more exhaustive information on these risks and uncertainties, readers should refer to Killam's most recently filed annual information form, Killam's most recently filed MD&A, as well as the Circular, each of which is, or will be, available on SEDAR+ at www.sedarplus.ca. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events may not occur. Although management believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Further, a forward-looking statement speaks only as of the date on which such statement is made and should not be relied upon as of any other date. While Killam anticipates that subsequent events and developments may cause its views to change, Killam does not intend to update or revise any forward-looking statement, whether as a result of new information, future events, circumstances, or such other factors that affect this information, except as required by law.

The forward-looking statements in this press release are provided for the limited purpose of enabling current and potential investors to evaluate an investment in Killam. Readers are cautioned that such statements may not be appropriate and should not be used for any other purpose. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE Killam Apartment Real Estate Investment Trust

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