Amid persistent economic volatility, Terra Firma said that it remains committed to maximizing shareholder value and liquidity
Real estate finance company Terra Firma Capital Corporation has announced that it has begun an internal process that will allow it to maximize value and liquidity for its shareholders.
The announcement by Terra Firma’s board of directors will involve a review process that will evaluate “potential strategic alternatives” for the company.
“Since inception, Terra Firma has successfully financed over $700 million of high-quality real estate transactions in Canada and the United States, while raising over $400 million through our global private investor network to support the growth of our assets under management,” said Y. Dov Meyer, executive chairman of Terra Firma Capital Corporation. “Despite our efforts, however, we continue to see a significant disconnect between our market value and the intrinsic value of our business.”
Meyer offered assurances that the review will take into account all possibilities available to the company when it comes to ensuring the best results for its shareholders.
“There can be no assurance that the strategic review process will result in any strategic alternative being chosen, or any assurance as to its outcome or timing,” the company said, adding that it has yet to set a timetable for the review process.
“Regardless of the outcome of our strategic review, the entire Terra Firma Capital team is fully committed to meeting the needs of our business partners, our fund investors, and shareholders,” Meyer said.
How did Terra Firma Capital Corporation perform during the third quarter?
Terra Firma had $142.6 million in total assets during Q3 2022, along with $122.5 million in total investments.
This was despite total revenue falling by 11.3% to $3.7 million.
The company said that it focused on “de-risking and retaining balance sheet liquidity” during the quarter, a move that was brought about by slower housing market activity, mounting inflation, persistent supply-chain issues, and a sharp growth in mortgage rates.
“The impact from these macroeconomic issues to homebuilders’ cost structures as well as homebuyers’ affordability has put significant pressure on resale and new home sales volumes and, to a lesser extent, home prices,” said Glenn Watchorn, president and CEO of Terra Firma Capital.
“The company continues to be cautious in its approach to selecting new investments and pricing until there is more clarity with housing and land market valuations. We believe that this will become more defined by early 2023.”
