The trust has been particularly affected by work from home culture due to its focus on the office spaces
Last year, Slate announced plans to alleviate its $1.175-billion debt burden by selling 40 per cent of its assets. The move was aimed at generating much-needed cash to repay debt.
In an effort to save cash, Slate reduced its monthly distribution by 70 per cent in early 2023 and eventually halted it altogether. Additionally, the company put several assets up for sale. Despite these measures, Slate announced on Tuesday that it does not expect to make cash interest payments on three convertible debentures, due June 30 and August 31.
At the same time, Slate continues to expand its portfolio with the announcement on June 10 of its acquisition of the World Seafood Center in Oslo, Norway, for approximately NOK$1.3 billion (CAD$167 million). The firm stated in a press release that this aligns with its strategy of focusing on stable, income-producing assets like grocery stores, pharmaceutical facilities, and logistics centres. The status of the deal is still pending.
In a statement, Slate said that it “continues to make progress on its previously announced portfolio realignment plan” and is working with senior lenders to “determine a mutually acceptable path forward.” Nevertheless, senior lenders have issued notices of default, preventing the REIT from making further interest payments on its outstanding debentures.
The impact on Slate’s publicly traded units has been severe, with a 94 per cent decline over the past five years as investors remain concerned that a debt restructuring could wipe out their equity value. The company did not respond to requests for comment.