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PATRIOT TRANSPORTATION HOLDING, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/396-5733
PATRIOT TRANSPORTATION HOLDING, INC. ANNOUNCES PLAN TO SEPARATE INTO TWO
PUBLIC COMPANIES AND PROVIDES UPDATE ON ANACOSTIA PROJECT
Jacksonville, Florida, May 7, 2014 - Patriot Transportation Holding, Inc.
(Nasdaq GM: PATR) announced today that it intends to separate its
transportation business from its real estate businesses. The separation will
result in two independent, publicly-traded companies by means of a tax-free
spin-off of the transportation business to Patriot shareholders.
The separation, which is subject to a number of conditions including final
Board approval, receipt of an opinion of tax counsel and effectiveness of a
registration statement on Form 10, is expected to be completed in the next
twelve months.
"Our management team is excited about the opportunities created by the
separation of the real estate and transportation businesses," said John Baker,
Executive Chairman.
Patriot believes that the separation will offer a number of advantages,
including the following:
* Distinct Investment Identity. The spin-off will create distinct and
targeted investment opportunities in the real estate company and the
transportation company. After the separation, investors will be able
to evaluate and invest in each business based on its merits, financial
performance and future prospects.
* Enhanced Business Focus. The separation will allow the board of directors
and management of each business to focus on its own strategic and
operational plans.
* Capital Resources. Each company will be able to deploy its capital
resources in a manner that is appropriate for its growth strategy.
* Access to Capital Markets. Both companies will have direct access to the
capital markets to pursue their respective growth opportunities.
* Enhanced Effectiveness of Equity Compensation. The separation will enhance
the effectiveness of equity based compensation programs of both companies
by directly tying the value of the equity compensation awards to the
performance of the business for which key employees provide services.
Patriot anticipates that after the spin-off the real estate company will
operate under the name FRP Holdings, Inc. and the transportation company will
use the name Patriot Transportation Holding, Inc.
Anacostia Update
----------------
Patriot also announced that the joint venture that it formed with its
developer partner has negotiated financing for the construction of the first
phase of its planned four phase master
Continued
development in Washington, D.C. known as Riverfront on the Anacostia.
Under the terms of the proposed financing, Patriot will contribute up to an
additional $5 million to the project. The joint venture expects to finalize
financing arrangements providing for a $65 million loan with an initial four
year term and approximately $17 million in EB5 secondary financing. Both these
financing sources will be non-recourse to Patriot. The Company expects to
finalize these financing arrangements and to commence construction by late
summer 2014.
About Patriot
Patriot Transportation Holding, Inc. is engaged in the transportation and
real estate businesses. Our transportation business (Florida Rock & Tank
Lines, Inc.) is a bulk tank carrier specializing in hauling petroleum and
other liquid and dry bulk commodities in the southeastern states. Our real
estate group acquires, constructs, leases, operates and manages land and
buildings to generate both current cash flows and long-term capital
appreciation. The real estate group also owns real estate which is leased
under mining royalty agreements or held for investment.
Forward-Looking Statements
Certain statements in this document regarding anticipated financial, legal
or other outcomes including business and market conditions, outlook and
other similar statements relating to Patriot's future events, developments
or financial or operational performance or results, are "forward-looking
statements" made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and other federal securities laws.
These forward looking statements are identified by the use of words such
as "may," "will," "should," "expect," "estimate," "believe," "intend,"
"anticipate" and other similar language. However, the absence of these or
similar words or expressions does not mean that a statement is not
forward-looking. While management believes that these forward-looking
statements are reasonable when made, forward-looking statements are not
guarantees of future performance or events and undue reliance should not
be placed on these statements.
Although Patriot believes that the expectations reflected in any
forward-looking statements are based on reasonable assumptions, it can give
no assurance that these expectations will be attained and it is possible
that actual results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and uncertainties.
Such factors include, but are not limited to: uncertainties as to the
timing of the spin-off and whether it will be completed, the possibility
that various closing conditions for the spin-off may not be satisfied or
waived, the expected tax treatment of the spin-off, the impact of the
spin-off on the real estate and transportation businesses, the ability of
both companies to meet debt service requirements and the availability and
terms of financing. Other important factors are described in the company's
most recent Form 10-K and 10-Q reports on file with the Securities and
Exchange Commission that could cause actual results or events to differ
materially from those expressed in forward-looking statements that may
have been made in this document. Patriot assumes no obligation to update
these statements except as is required by law.