ARC Global Trust II Advisor to Repay $6.3 Million in Organizational Costs
American Realty Capital Global Trust II Inc., a publicly registered non-traded real estate investment trust, entered into an agreement with its advisor, American Realty Capital Global II Advisors, and AR Global Investments, for the reimbursement of organizational and offering costs incurred by the REIT during its initial public offering. The costs, which total $6.3 million, exceeded the 2 percent gross offering proceed limit in the IPO.
This week, The DI Wire reported that shareholders of American Realty Capital Global Trust II voted and approved the proposed merger transaction with of Global Net Lease (NYSE: GNL).
Global Trust II’ s initial public offering was suspended in November 2015 following a series of scandals with affiliated companies that eventually led to the termination of all AR Global-sponsored investment programs. The IPO lapsed in accordance with its terms in August 2016 and Global II’s board and the advisor have been engaged in discussions regarding the payment of the excess costs.
The agreement, which was negotiated on behalf of the REIT and approved by its independent directors, provides for reimbursement of the $6.3 million though the tender of 66,344 class B units of limited partnership interest of American Realty Capital Global Trust II Operating Partnership, previously issued to the advisor as payment in lieu of cash for asset management services. The reimbursement can also be paid in equal cash installments over an 8-month period.
The balance to be repaid will be determined using a valuation for each class B unit of 2.27 times the 30-day volume weighted average price of each share of common stock of Global Net Lease on the date of the consummation of the merger.
AR Global has unconditionally and irrevocably guaranteed the advisor’s obligations to repay the monthly installments.
