RAIT Financial Trust has paid $20.5 million to buy back and cancel certain securities held by ARS VI Investor I LP after the investor delivered a put right notice to the company.
Following the redemption of common share purchase warrants and common share appreciation rights held by the investor, the company expects to book a gain on extinguishment of debt of approximately $5.5 million. It also expects the redemption to improve its leverage position and compliance with the related financial covenants within certain of its debt.
The securities had been issued to the investor as part of an Oct. 1, 2012, securities purchase agreement. Andrew Silberstein, who sits on RAIT's board of trustees as the investor board designee, is an equity owner of the investment adviser of ARS VI Investor I LP, Almanac Realty Investors LLC, an officer of the investor, and holds indirect equity interests in it.
ARS VI Investor I LP still holds 3,133,720 series D preferred shares, which represents all of the company's outstanding series D preferred shares.
RAIT announced in September that it was reviewing strategic alternatives after its net losses widened year over year in the past two quarters.