BINGHAM FARMS, Mich., March 19 /PRNewswire-FirstCall/ -- The board of
directors of Malan Realty Investors, Inc. (NYSE: MAL), a self-administered
real estate investment trust (REIT), today announced it has voted to recommend
a plan of liquidation to the company's shareholders. The proposed plan
contemplates the sale of all the company's properties and other assets and
will be subject to shareholder approval at the annual meeting of shareholders,
scheduled for later this summer, as well as to agreements from some of the
company's lenders. The board believes at this time that the plan of
liquidation is the best course of action to maximize shareholder value, given
the current trading price of the company's common stock.
"From the time the current board was elected, our strategic plan has
always included all possible options, including liquidation," stated Jeffrey
D. Lewis, Malan's chief executive officer. "At this juncture, the board has
decided that liquidation offers the best possibility for shareholders to
realize a premium to the current trading price of our stock." Factors
influencing the board's decision include the company's debt structure,
including the over-leverage at Bricktown, impediments to the redevelopment of
Malan's Farmington Hills, Michigan property, the recession, and the bankruptcy
filing of Kmart Corporation, the company's largest tenant.
If the shareholders approve the plan of liquidation, Malan expects to
achieve meaningful reductions in operating costs during the liquidation
period. The company is actively considering a number of cost-control
measures, including reducing general and administrative expenses. In
addition, the board has voted to decrease the size of the board of directors
from seven directors to five at the next annual meeting.
Management does not anticipate any immediate reductions in staff because
the number of owned and managed properties generally determines Malan's
staffing requirements. Staff reductions are anticipated to begin after the
formal approval of the plan of liquidation and will be consistent with the
reduced size of the company.
In anticipation of the adoption of a plan of liquidation and because of
the uncertainty surrounding the company's cash flow due to the Kmart
bankruptcy filing, the board announced it is indefinitely suspending the
regular quarterly cash dividend, which would have been declared at this time.
It is currently contemplated that during the liquidation period, cash
generated from operations and property sales will be used first to make
required repayments of debt and other liabilities, and then distributed to
common shareholders.
The liquidation plan will not become effective until after shareholder
approval. The liquidation process is anticipated to proceed in an orderly
fashion and could take 24 months or more to complete from the date of
shareholder approval. However, there are no assurances that the process will
be either shorter or longer than the current time estimate. The company's
common stock is expected to qualify for continued listing on the New York
Stock Exchange until total market capitalization drops below $15 million.
Chicago-based Cohen Financial is advising the company on the sale of
properties as part of the liquidation process. For further information,
contact Richard Tannenbaum at (312) 346-5680.
Malan Realty Investors, Inc. owns and manages properties that are leased
primarily to national and regional retail companies. The company owns a
portfolio of 58 properties located in nine states that contains an aggregate
of approximately 5.4 million square feet of gross leasable area.
Safe Harbor Statement: This news release contains forward-looking
statements. Although the company believes that the statements and projections
are based on reasonable assumptions, actual results may differ from those
projected. Key factors that could cause actual results to differ materially
include uncertainties regarding the length of time required to sell the
company's properties, the impact of market conditions on the sales prices for
the company's properties, the cost of litigation in which the company is
involved, bankruptcies and other financial difficulties of tenants, including
the ultimate disposition of lease agreements with Kmart Corporation, and other
risks associated with the commercial real estate business, as detailed in the
company's filings from time to time with the Securities and Exchange
Commission. Many of these factors are beyond the control of the company.
Malan does not undertake to update these forward-looking statements.
News releases for Malan Realty Investors are available on the company's
web site at http://www.malanreit.com or through Company News On-Call by fax at (800)
758-5804, ext. 114165, or http://www.prnewswire.com .
SOURCE Malan Realty Investors, Inc.
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Related links:
http://www.malanreit.com
CONTACT:
Jeffrey D. Lewis, President and CEO of Malan
Realty Investors, Inc., +1-248-644-7110, or Fred Nachman of
Marjan Communications Inc., +1-312-867-1771
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