Malan Seeks Approval for Liquidation Plan

On March 19, the board of directors voted to recommend a plan of liquidation to Malan's shareholders. The plan, which was approved by the board this month, provides for the orderly sale of assets for cash or such other form of consideration as may be conveniently distributed to shareholders, payment of or establishing reserves for the payment of liabilities and expenses, distribution of net proceeds of the liquidation to common shareholders, and wind up of operations and dissolution of the company.

The board believes net proceeds to shareholders will range from $4.75 to $8.50 per share. Malan stock was trading at $5.70 per share Friday morning.

"We believe that $8 per share is realistic based upon certain assumptions that we consider reasonable," says Jeffrey Lewis, president and chief executive officer of Malan Realty Investors. "This value is based on an orderly disposition of assets that reflects their underlying values; however, actual circumstances could differ from our assumptions and shareholders could receive more or less than the $8 estimate."

The liquidation plan is expected to take up to 24 months to complete although it could take longer. Malan currently estimates total proceeds from the sale of properties, before selling costs, will be in the range of $223 million and $235 million and a minimum of $184 million in debt will be repaid.

The estimated per-share range also includes income expected to be earned from properties during the liquidation process and expenses including advisory fees.

Malan announced last week it had entered into contracts for the sale of 15 properties totaling approximately 2.1 million sf of gross leasable area for a total of $94 million before debt repayment. The company is also in negotiations for the sale of 17 additional properties, with projected proceeds before debt repayment of approximately $50 million.

The company owns and manages 57 properties that are leased primarily to national and regional retail companies.