H&R Real Estate Investment Trust, a Canadian diversified REIT, and H&R Finance Trust scrapped their original internal reorganization plan in light of the U.S. federal income tax legislation signed into law in December 2017, among other considerations.
The amended reorganization plan will involve, among other things, H&R Finance Trust transferring debt owed to it by H&R REIT's U.S. subsidiary to H&R REIT, and unit holders subsequently transferring their H&R Finance Trust units to H&R REIT for nominal consideration while keeping their H&R REIT units.
The amended plan eliminates certain aspects of the original proposal, including the formation of H&R Finance (2017) Trust to replace H&R Finance Trust, the transfer of U.S. holdco debt by H&R REIT to the new entity and the stapling of units of H&R REIT with H&R Finance (2017) Trust units.
Upon completion of the reorganization, investments held through H&R REIT and H&R Finance Trust will be held exclusively through H&R REIT. H&R REIT units will trade on the Toronto Stock Exchange under the HR.UN ticker and H&R Finance Trust will be dissolved.
The amended reorganization plan, expected to be rolled out by August, is contingent on an advance income tax ruling from the Canada Revenue Agency and other customary closing conditions.