Ableauctions.com Inc. (AMEX:AAC) (the “Company”) announced today that its wholly-owned subsidiary, Axion Investment Corporation, has received conditional approval from the Royal Bank of Canada that will allow it to begin using a $16 million construction financing loan for the development of a 111 unit condominium project (the “Gruv project”). There were several conditions that Axion was required to meet prior to obtaining approval from the Royal Bank of Canada, including entering into fixed price contracts for at least 80% of the project’s hard construction costs. Axion has awarded contracts for more than 51% of the project’s hard construction costs which will allow it to begin drawing on the construction loan. The company expects to award an additional 30% in fixed price contracts in order to fully satisfy the bank’s requirements and avoid any disruption in financing. Until it meets all of the conditions of the construction financing, Axion intends to enter into a revolving loan agreement with its President and CEO, Abdul Ladha, in order to avoid any cash shortfalls during the construction process.
The Gruv project is expected to be completed in approximately 17 months and is expected to generate revenue before expenses in excess of $25 million CAD if Axion is successful in completing the project on schedule and on budget.
With the Gruv project now moving forward, Axion intends to finalize a joint venture and land development agreement with Mr. Ladha. Additionally, Axion intends to acquire four additional properties that are adjacent to the Gruv project from Surrey Central City Holdings Ltd., a company controlled by Mr. Ladha. In 2005, in an effort to increase shareholder value, diversify the Company’s assets and provide a reliable source of income, the Company’s board of directors approved the acquisition of the development opportunity presented by Mr. Ladha. Management believes that acquiring the additional land adjacent to the Gruv development is the natural progression to this investment strategy. The land acquisition and joint venture development agreements are currently being considered by the independent members of the Company’s board of directors with the guidance of independent consultants.
Ableauctions.com Inc. (AMEX “aac”) is a high-tech liquidator and on-line auction facilitator that operates the domains iCollector.com, Naalive.com and Unlimited Closeouts.com.
As an on-line auction facilitator, the Company, with the experience of over 3,000 auctions, has developed state-of-the-art technology to broadcast auctions over the Internet ( http://www.ableauctions.com/technology ) and currently provides the technology and related services to auction houses, enabling them to broadcast auctions over the Internet. The Company broadcasts business and industrial auctions over the Internet for auctioneers and members of the National Auctioneers Association (NAA) and art, antique and collectible auctions for numerous galleries and auction houses around the world through eBay Live Auctions.
As a liquidator, the Company, through Unlimited Closeouts, purchases overstocks, order cancellations and discontinued products from major manufacturers and importers, then sells the merchandise to major retail chains, other resellers or the public.