Walton Westphalia Development Corporation Announces That Its Debentures and Interest Debentures Will Be Converted into Class B Shares Effective May 6, 2019

Walton Westphalia Development Corporation (the Corporation) announces that the Corporation has elected to exercise its right under the trust indenture (the Indenture) governing the Corporations 8% unsecured, subordinated, convertible, extendable debentures and related interest debentures (collectively, the “Debentures“) to convert (the Conversion) all of the principal amount of the Debentures and unpaid accrued interest thereon up to May 6, 2019 into Class B non-voting common shares of the Corporation (Class B Shares). The Conversion is scheduled to occur effective May 6, 2019.

Pursuant to the terms of the Indenture, the directors of the Corporation have determined that, on the Conversion, holders of Debentures will receive, for each $1,000 amount of Debentures and outstanding interest (including all previously issued interest debentures) thereon, 2,104.51 Class B Shares. Therefore, on May 6, 2019, the estimated total $23.9 million of Debentures and interest thereon outstanding will be converted into approximately 50,408,671 Class B Shares. Immediately after the completion of the Conversion, there will be a total of approximately 53,425,841 Class B Shares outstanding and no Debentures outstanding. Fractional Class B Shares will be issued on the Conversion rounded up to the nearest fourth decimal.

As each of the holders of Class B Shares prior to the Conversion are also debenture holders at that time based on the proportions issued by the Corporation under its original prospectus and private placement offerings, the percentage of the total number of outstanding Class B Shares held by each such shareholder immediately following the Conversion will not change as a result of the Conversion. There will be no dilution of any ownership interest, all existing shareholders will continue to own their existing percentage of the overall assets and liabilities of the Corporation.

Prior to the conversion, the maturity date of the Debentures was to be March 31, 2020 (extended from original maturity date of March 31, 2019). It is anticipated that there will not be sufficient funds in the Corporation to repay the Debentures on the maturity date. As a result, the directors of the Corporation determined that it was appropriate to convert the Debentures effective May 6, 2019. Annual interest payments for the Debenture were due to be made on the 30th day of June each year and would have had to be satisfied by the issuance of Interest Debentures in lieu of cash. The directors determined the conversion appropriate due to the continued accrual of interest on the Debentures not being in the best interests of the project or the Corporations investors.

The Conversion will have no impact on the forecast return on investment to the investor. The return on investment is based on achieving certain revenue targets, obtaining profits from the joint venture vertical development of one of the Corporations assets, maintaining construction schedules, the timely receipt of recoveries from benefitting developments and third-party lot and land sales. Managements strategy for improving the return on investment includes exploring refinancing of debt to reduce interest rates and pursuing additional joint venture horizontal and/or vertical development opportunities to earn increased profits. Material changes to the return on investment could occur due to changes in the aforementioned and other factors.

No action will be required on the part of the Debenture holders to complete the Conversion. The Conversion will be processed by the trustee of the Debentures, Computershare Trust Company of Canada and, upon issuance of the Class B Shares, the Corporation will be discharged of all of its liability for the repayment of the principal amount and unpaid interest accrued under the Debentures. Notwithstanding that no action is required on the part of Debenture holders with respect to the Conversion, the Corporation and Computershare request that Debenture holders mail the certificates evidencing their Debentures (including interest debentures) to Computershare for cancellation at the following address:

Computershare Trust Company of Canada 600, 530 “ 8th Avenue SW Calgary, Alberta T2P 3S8 Attention: Corporate Trust

Additional Information

The Corporation is managed by Walton Global Investment Ltd and the development of the project is managed by Walton Development & Management (USA), Inc., both of which are members of the Walton Group of Companies.

The Walton Group of Companies (Walton) is a multinational real estate investment, planning, and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors.

Its communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Its goal is to build communities that will stand the test of time: hometowns for present and future generations.

For more information about Walton Westphalia Development Corporation, please visit www.sedar.com. For more information about Walton, visit www.Walton.com.

This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com. Except as otherwise noted, all amounts are in Canadian dollars.

For media inquiries, please contact: Camila Roncancio
Email: [email protected]