Keystone does not receive any proceeds from the sale, nor does the sale impact its number of shares outstanding. The conversion of common stock to operating partnership units, however, provides Keystone with the following benefits:
•A 15%-increase in the company's float, which rises to in excess of 30 million shares.
• A 35%-reduction in the liquidation value of outstanding preferred securities, which now represent approximately just 6% of Keystone's total market capitalization retroactive to Dec. 31, 2003.
• A reduction in dividend payments that will result in an annual savings of approximately $700,000 in cash flow.
• An increase in the REIT's ownership of the operating partnership to 86% from $74%.
• A 71% reduction in the value of the company's properties that will be subject to 1031 Exchange obligations when they are sold, leaving the gross book value of Keystone assets that remain subject to 1031 Exchange obligations at $80 million.
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