TransGlobe Apartment REIT privatization would occur as a sale and redemption transaction

There is a proposed privatization of TransGlobe Apartment REIT.  A portion of the REIT assets will be sold to members of the acquisition consortium, thereby triggering capital gains and recapture of depreciation.  All of this income (plus additional income resulting from a loss of the REIT's usual capital cost allowance claims) will be  pushed out to the public REIT unitholders in two ways: first, through a special cash distribution to them; and second, as a result of this increase in REIT income retroactively eliminating the tax-deferred percentage of monthly distributions previously paid by the REIT in 2012.  The public's units then are redeemed in part out of cash unit subscription proceeds received from another consortium member.

Among many other interesting features, the retroactive decrease in the tax deferral percentages will retroactively increase the Part XIII tax applicable to the related distributions.

Neal Armstrong.  See summary of 06 June 2012 Circular for privatization of TransGlobe Apartment REIT.