CIBT Confirms Subject Removal on the Sale of a GEC® Project for $55.5 Million
July 23, 2018
Vancouver, B.C. July 20th, 2018 – CIBT Education Group Inc. (TSX: MBA, OTCQX International: MBAIF) (“CIBT” or the “Company”) is pleased to report that one of the real estate limited partnerships in which it holds an interest has executed a subject removal agreement pertaining to the sale of one of the GEC® branded Vancouver properties (the “Property”). Closing of the purchase and sale is scheduled for the first week of August. As a result of this transaction, CIBT and the other limited partners will exit this project with a profit of approximately $20 million after an investment period of 41 months. This GEC® project was acquired by the limited partnership in February 2015 for $29.5 million. An additional $6 million was spent on a variety of value added services such as rezoning, re-design and retrofit for higher density usage and approximately $0.5 million will be spent on certain upgrades before closing.
The sale price for the Property is approximately $55.5 million. As a condition of the sale, a CIBT subsidiary, Global Education City Management Corp. (“Global Management”), will lease the building from the purchaser for five years. Global Management will continue to provide its valued-added rental services to the domestic and international students residing at the Property. It will continue to operate under the GEC® brand and management for the five years following closing.
“The successful exit of this project on closing and the previous one that was announced in March 2018 have proven our business model as one of Canada’s leading private colleges and language schools with a fully integrated student housing division to address the supply of incoming students from across Canada and abroad. The limited partnership investors in this project will, on closing, have entered and exited their investments within 41 months with an attractive return”, commented Toby Chu, President, CEO and Chairman of CIBT. “Thisproject has been rewarding to both CIBT shareholders and the other limited partners. The original limited partners in this project invested $6 million and earned a 333% return on invested capital in 41 months, an average return of 97.6% per year. Due to the success of this project, investors have committed their profits to be rolled into another GEC® branded project to be announced shortly.”
“As the demand for available student housing continues to increase at a rapid pace with limited supply coming into the market”, continued Toby Chu, “our rapidly growing investment portfolio of market rental apartments, condominiums, hotel and education super centers are filling a much needed void in the Metro Vancouver market. As demand for international education continues to rise, our expectation is that our portfolio will continue to achieve higher valuation given the steady cash flow generated from the GEC® branded properties. Equally important, our corporate owned colleges and language schools are able to provide a one-stop solution to our students by combining education with accommodation in one unique package which enhances our overall income. These benefits were duly reflected in our recently announced quarterly results.”
About CIBT Education Group:
CIBT Education Group Inc. is one of the largest education and student housing investment companies in Canada, focused on the global education market since 1994. Listed on the Toronto Stock Exchange and U.S OTCQX International, CIBT owns business and language colleges, student housing properties, recruitment centres and corporate offices at 43 locations in Canada and abroad. Total annual enrollment for the group exceeds 15,000 students. Its education providers include Sprott Shaw College (established in 1903), Sprott Shaw Language College, Vancouver International College and CIBT School of Business. Through these schools, CIBT offers business and management programs in healthcare, hotel management, language training, and over 150 career, language and vocational programs. CIBT owns Global Education City Holdings Inc., an investment holding and development company focused on developing education related real estates such as student hotels, serviced apartments and education super centres. Total portfolio and development budget of projects under the GEC® brand is more than C$1 billion. CIBT also owns Global Education Alliance (“GEA”) and Irix Design Group (“Irix Design“). GEA recruits international students on behalf of many elite kindergartens, primary and secondary schools, colleges and universities in North America. Irix Design is a leading design and advertising company based in Vancouver, Canada. Visit us online and watch our corporate video at www.cibt.net.
Chairman, President and Chief Executive Officer
CIBT Education Group Inc.
Investor Relations Contact: 1-604-871-9909 extension 318 or | Email: firstname.lastname@example.org
Some statements in this news release contain forward-looking information (the “forward-looking statements”). Forward-looking statements are statements that are not historical facts and in this news release include, without limitation, statements as to the expected closing of the sale of the Property and that investors in this project have committed their profits to be rolled into another GEC® branded project. Forward-looking statements are subject to various risks, uncertainties and other factors (collectively, “Risks”) that could cause CIBT’s actual results or achievements to differ materially from those expressed in or implied by forward-looking statements. The Risks include, without limitation, that the closing of the sale of the Property won’t occur when expected or at all, and that the investors will not honour their commitment to roll their profits into another GEC® branded project. Forward-looking statements are based on the beliefs, opinions and expectations of CIBT’s management at the time they are made, and CIBT does not assume any obligation to update its forward-looking statements if those beliefs, opinions or expectations, or other circumstances should change, except as may be required by law.