CAPITAL PROPERTIES, INC. (OTCMKTS:CPTP) Files An 8-K Completion of Acquisition or Disposition of Assets


CAPITAL PROPERTIES, INC. (OTCMKTS:CPTP) Files An 8-K Completion of Acquisition or Disposition of Assets

Item 2.01. Completion of Acquisition or Disposition of Assets.

On February 10, 2017 (the “Closing Date”), Capital Properties,
Inc. (the “Company”) and its two wholly-owned subsidiaries,
Capital Terminal Company (“CTC”) and Dunellen, LLC
(“Dunellen” and together with the Company and CTC, the
“Sellers”), in accordance with that certain Asset Purchase
Agreement, by and between the Sellers and Sprague Operating
Resources LLC (“Sprague”), a subsidiary of Sprague Resources
LP, dated January 24, 2017 (the “Purchase Agreement”),
completed the sale of the Company’s East Providence, Rhode
Island petroleum storage terminal, Wilkesbarre Pier, pipelines
connecting the terminal to the Pier and related terminal assets
(the “Purchased Assets”). Capitalized terms used but not
otherwise defined herein have the meanings set forth in the
Purchase Agreement.
From May 1, 2014 through the closing of the sale of the Purchased
Assets, the terminal’s entire distillate storage capacity was
leased exclusively to Sprague.
The aggregate purchase price for the Purchased Assets was $23.0
million dollars plus the assumption of the Assumed Liabilities
(the “Purchase Price”). The Purchase Price was negotiated by
the Sellers and Sprague, with the Sellers receiving advice from
an unaffiliated investment bank advisory firm retained by the
Sellers to assist in the valuation, marketing and sale of the
Purchased Assets. Of the Purchase Price, $1,040,000 was withheld
to cover repairs to breasting Dolphins located on the Wilkesbarre
Pier (the “Dolphin Expenses”) and $1,725,000 will be held in
escrow (50% for 12 months and the balance for 2 years) to provide
an indemnity to Sprague in the event of any breach of the
Sellers’ representations, warranties and covenants. The net
amount received by the Company after the Dolphin Expenses
holdback, escrow and additional adjustments for fees and real
estate transfer taxes was approximately $19.8 million dollars.
Item 2.04.
Triggering Events that Accelerate or Increase a Direct
Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement
Under Section 5 of the Company’s outstanding 5% Dividend Notes
Due 2022 (the “Notes”), upon the sale of all or any portion of
the Company’s real property or the real property of any Company
subsidiary, the Company is required, within 90 days from the
Closing Date, to redeem that amount of the Notes at a redemption
price equal to the maximum amount of the Net Proceeds from the
sale of the real property, that when divided by 100 results in a
whole number. For this purpose, “Net Proceeds” means the gross
cash proceeds received by the Company as a result of the sale of
the real property less the sum of (a) the expenses of sale, (b)
the Federal and state taxes incurred as a result of the sale and
(c) the amount of the gross cash proceeds used by the Company to
pay in whole or in part financial institution debt secured by a
mortgage on its real property, regardless of whether such
mortgage encumbered the property sold. The closing of the sale of
the Purchased Assets described in Item 2.01 above triggered this
mandatory redemption provision of the Notes. The Company has not
yet determined the amount of the “Net Proceeds” (as defined in
the Notes), but currently expects to redeem the Notes in full on
or before May 11, 2017.
Item 5.02(e). Compensatory Arrangements of Certain Officers
In connection the sale of the Purchased Assets described in Item
2.01 above, the Compensation Committee of the Company’s Board of
Directors approved a bonus for the Company’s Vice-President,
Todd D. Turcotte, in the amount of one year’s salary ($191,464).
This bonus was conditioned on the successful completion of the
sale described in Item 2.01 hereof and was paid promptly
following the closing.


Capital Properties, Inc., through its subsidiaries, operates in two segments: leasing and petroleum storage. The Company’s subsidiaries include Tri-State Displays, Inc., Capital Terminal Company and Dunellen, LLC. The leasing segment leases Company-owned land in the Capital Center area (Capital Center) in downtown Providence, Rhode Island under long-term ground leases. The petroleum storage segment includes Terminal and Pier Facility. The Company owns approximately 20 acres in the Capital Center consisting of over 10 individual parcels. It leases Parcels 3E, 3W, 4E and 4W in the Capital Center area for public parking purposes on a short-term basis. The Company leases a parcel of land adjacent to the Capital Center for public parking purposes on a short-term basis. The Company, through Dunellen, LLC, owns a petroleum storage terminal containing approximately 1,004,000 shell barrels (the Terminal) and the Wilkesbarre Pier (the Pier).


CAPITAL PROPERTIES, INC. (OTCMKTS:CPTP) closed its last trading session 00.00 at 14.15 with 2,550 shares trading hands.