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 TORONTO, Oct. 28 /PRNewswire/ -- Olympia & York Developments Limited

(OYDL) announced today that on Oct. 27, 1992, OYDL and its 28 Canadian subsidiaries (collectively, "Olympia & York") filed with the Ontario Court of Justice their Plan of Compromise and Arrangement under the companies' Creditors Arrangement Act and will file today with the United States Bankruptcy Court for the Southern District of New York a reorganization plan for OYDL and SF Holdings Corporation under Chapter 11 of the U.S. Bankruptcy Code. Consummation of both plans (collectively, the plan) is subject to approval of the Ontario Court and the U.S. Bankruptcy Court.
 The plan filed by Olympia & York proposes a major restructuring which will result in all of its assets being held by four companies each capable of operating separately and independently of the other.
 First, the existing shareholders will establish a new company to hold their interests in OYDL and the two new companies discussed below.
 Secondly, bonds of OYDL will be issued to the unsecured creditors of OYDL in the amount of their debt and, unless repaid in full on maturity, will be satisfied by the issuance of 90 percent of the equity in OYDL.
 Thirdly, a new Canadian real estate company, owned to the extent of 90 percent by OYDL and 10 percent by the company established by the existing shareholders, will be formed to hold the major Canadian real estate assets of OYDL. This company will be able to benefit from any future upturn in the Canadian real estate market.
 Finally, all of OYDL's interests in its U.S. real estate will be spun off into a second new company. This company will also be able to benefit from upturns in the U.S. real estate market. The separate existence of this company should achieve substantial benefits for unsecured creditors. Ultimately, it is expected that this company will be owned 51 percent by the company established by the existing shareholders and 49 percent by the unsecured creditors.
 OYDL believes that a successful vote on the plan will achieve (a) the recognition and resolution of creditor claims, (b) appropriate guidelines for the management of Olympia & York and the disposition of selected assets, and (c) the preservation of valuable business assets.
 Reichmann Holdings
 The plan anticipates that a new company (referred to as Reichmann Holdings) will be incorporated by the existing shareholders of OYDL and that this company will own 100 percent of the issued shares of OYDL until the maturity of the bonds to be issued to unsecured creditors of Olympia & York as described below. On maturity, the bonds will be satisfied by the issuance of 90 percent of the shares in OYDL unless fully paid in cash.
 Olympia & York Realty Corp.
 Olympia & York Realty Corp. is the company through which OYDL owns its U.S. operations, including its interests in U.S. real estate and common shares of two U.S. public companies, Catellus Development Company and Santa Fe Energy Resources.
 As a first step in the reorganization of Olympia & York, the plan anticipates that Olympia & York Realty Corp. will be transferred out of Olympia & York Developments Limited to be held by a new company (referred to as OYRC Holdings). Warrants to purchase 49 percent of OYRC Holdings will be issued to the trustee for the bondholders of OYDL and these warrants will be distributed ratably among the bondholders on the maturity of the OYDL bonds. The remaining 51 percent will be owned by Reichmann Holdings.
 As part of this transfer, OYRC Holdings will issue to OYDL a note for U.S. $500 million maturing in 10 years and bearing interest at 7-1/2 percent per annum. This note will be assigned to the trustee for the OYDL bondholders and, will be distributed ratably to the bondholders in three years in partial payment of the outstanding balance of the bonds.
 The spin-off of Olympia & York Realty Corp. must be effected as part of confirmed Chapter 11 plan for OYDL. As a result, the implementation of the Canadian plan will be conditional on the confirmation by the U.S. Bankruptcy Court of OYDL's Chapter 11 plan.
 Bonds of OYDL
 All unsecured creditors of Olympia & York who are affected by the plan (including deficiency claims of undersecured creditors as determined under the plan) will exchange their claims for bonds of OYDL. The bonds will mature on the fifth anniversary of the implementation of the plan (subject to retraction after year three by bondholders), will be non-interest bearing and will be paid until maturity to the extent of available cash flow in OYDL. On maturity, OYDL will satisfy any unpaid balance of the bonds by the issue to the bondholders of common shares of OYDL representing 90 percent of OYDL. Reichmann Holdings would then own 10 percent of OYDL.
 O&Y Properties
 The plan also anticipates that a new company (referred to as O&Y Properties) will be incorporated by OYDL and that OYDL will transfer its interests in a number of major Canadian real estate properties to this new company. It is contemplated that O&Y Properties will be a solvent, self-sustaining company with the potential to enhance values for the benefit of its shareholders. OYDL will own 90 percent of O&Y Properties and Reichmann Holdings will own 10 percent. Under the plan, O&Y Properties will manage all the properties in which it has an interest and, in addition, certain other real estate properties the interests in which are owned by OYDL.
 Three downtown Toronto properties, First Canadian Place, Exchange Tower and Scotia Plaza, will be included in the properties transferred to O&Y Properties. The plan proposes that a joint venture will be formed in respect of the Toronto properties between four Canadian Banks and O&Y Properties under which the banks will initially own 80 percent of the equity in the joint venture and O&Y Properties 20 percent. This proposal is conditional on the approval of the four banks and other affected parties. The banks' loan to OYDL in the principal amount of $131 million will be converted to capital in the joint venture and the charges taken by the banks on the Toronto properties to secure this and other loans will be released. For a period of three years, up to an additional 30 percent of the equity in the joint venture could be acquired for value equally by O&Y Properties and Reichmann Holdings. The plan proposes that the banks will make available to the joint venture a revolving credit facility of $50 million for tenant inducements. The plan also contemplates that project lenders to the Toronto properties will extend the maturities of their loans for five years and reduce their interest rates to 7 percent payable out of available cash flow. In the case of First Canadian Place and Scotia Plaza, it is proposed that the banks will guarantee that, until maturity, the interest paid annually to the lenders out of available cash flow will be at least 5 percent.
 OYDL's interests in 240 Sparks Street and L'Espanade Laurier in Ottawa, Edmonton City Centre in Edmonton and Shell Centre, Amoco Centre and Gulf Canada Square in Calgary will also be transferred to O&Y Properties. In the case of 240 Sparks Street, principal and interest in respect of the $50 million principal amount of bonds issued by Olympia & York 240 Sparks Street Limited will continue to be paid in accordance with their terms.
 The plan proposes that two Canadian real estate properties owned by OYDL, Aetna Centre in Toronto, and Fifth Avenue Place in Calgary will be transferred to the lenders to those properties. Any deficiency claims against Olympia & York will be released. In the case of Fifth Avenue Place, the transfer is to be made to a company owned as to 100 percent by the holders of the Series A Secured Debentures in the principal amount of $30 million issued by Olympia & York (Fifth Avenue Place) Limited. The plan contemplates that the holders of the Fifth Avenue Place Bonds in the principal amount of $145 million will extend the maturity date of their bonds for five years and fix the interest on their bonds at 8.5 percent accruing semi-annually commencing July 1, 1993 and payable out of available cash flow.
 GW Utilities Limited
 As a further step in the plan, GWU Capital Limited (which is currently wholly owned, indirectly, by members of the Reichmann family) will contribute the outstanding common shares of GWU Holdings Limited to OYDL. As a result, GW Utilities Limited will become an indirect 89.3 percent-owned subsidiary of OYDL. Olympia & York intends to pursue a privatization of GW Utilities once an agreement for the sale of Home Oil Company Limited is made. Any privatization proposal would require the co-operation of the lenders to OYDL which hold shares of GW Utilities as security and would be subject to approval of a special committee of the board of directors of GW Utilities and requisite shareholder approvals.
 Gulf and Abitibi and Carena Lenders
 The plan also addresses the claims of lenders to Olympia & York whose loans are secured by approximately 70 percent of the common shares of Gulf Canada Resources Limited and 79 percent of the common shares of Abitibi-Price Inc. and whose loans are secured by Olympia & York's interest in CPHI Properties Inc. (which in turn owns 34 percent of the equity shares in Trizec Corporation Ltd.). The plan generally provides that existing loan terms are to remain unaffected but with pre-default contract rates of interest to be payable only to the extent of available cash flow. Improved rights in respect of existing collateral are provided. Since the loans are effectively on a demand basis, the plan deals with the resolution of deficiency claims against OYDL if the loans are demanded. Any deficiency claims against OYDL are extinguished if the loans are demanded in the first year, 75 percent of the claims are extinguished if demanded in the second year, 50 percent are extinguished if demanded in the third year and thereafter all deficiency claims are recognized. Any deficiency claims recognized will be satisfied by the bonds to be issued by OYDL as described above.
 Marketable Securities Lenders
 The plan also addresses the claims of the marketable securities lenders. Each lender will have the right to require the pledged securities of any class to be transferred to such lender effective on the completion of the plan in satisfaction of all or a portion of its indebtedness based upon the market value of the transferred securities and in exchange for a release of the deficiency claims against OYDL attributed to the transferred securities. In the case of lenders who elect to stay in the plan, the plan provides for an orderly disposition of their pledged securities over a time period agreed to with individual lenders. Any deficiency claims existing on completion of the program will be recognized and satisfied through the issuance of OYDL Bonds. Securities pledged by Olympia & York include: 89.3 percent of the common shares of GW Utilities; 68 percent of the Series 1 Preference Shares of Gulf Canada Resources; 5 percent of the common shares of Gulf Canada Resources; 3.2 percent of the common shares of Abitibi-Price; 15 percent of the common shares of Catellus; 15 percent of the common shares of Santa Fe Energy; 33 percent of the ordinary shares of Stanhope Properties plc; and 8 percent of the Class A shares of Trizec.
 To avoid disputes and litigious claims on the completion of the comprehensive restructuring proposal set forth in the plan, the plan contemplates mutual releases in favor of all affected creditors, the applicants, their shareholders, directors, officers and others. Potential preference issues relating to recent security transactions will be resolved through these releases.
 Canary Wharf and U.S. Operations
 The plan principally deals with Canadian assets and parent company holdings. The plan does not address the ongoing business of Canary Wharf presently operating under administration in the U.K., but only deals with lender claims arising out of Canary Wharf.
 U.S. Operations
 The Chapter 11 Reorganization Plan does not deal with the assets or liabilities of Olympia & York Reality Corp., O&Y Equity (Canada) Ltd. or O&Y (U.S.) Development Canada Ltd., which own and control O&Y's U.S. subsidiaries, or the assets and liabilities of the U.S. subsidiaries. The U.S. subsidiaries are currently engaged in discussions with their lenders and are attempting to effect a consensual restructuring of their indebtedness. It is anticipated that Olympia & York Realty Corp., O&Y Equity (Canada) Ltd. and O&Y (U.S.) Development Canada Ltd. will file a separate plan under Chapter 11 in conjunction with the consensual restructuring for the U.S. subsidiaries.
 Creditor Classes and Voting
 The plans provide for voting by classes or creditors in accordance with the requirements of both the CCAA and Chapter 11 of the U.S. Bankruptcy Court. For purposes of voting under the CCAA, voting by 34 separate classes of creditors will take place at meetings presently scheduled to be held, in accordance with the timetable established by the Ontario Court, between Nov. 25 and Nov. 30, 1992. Voting under Chapter 11 will take place in accordance with the timetable to be established by the U.S. Bankruptcy Court upon its approval of a disclosure statement to be disseminated to creditors.
 Any information circular describing in detail the CCAA plan and relevant business and financial information sufficient to permit the creditors to evaluate the merits of the CCAA Plan will be mailed to creditors in advance of the scheduled meetings. A disclosure statement containing similar information will be filed with the U.S. Bankruptcy Court in the near future and, subject to its approval by the Court, will be disseminated to creditors of OYDL and SF Holdings in connection with voting on the plan under Chapter 11.
 -0- 10/28/92 R
 /CONTACT: Frank Ternan of Olympia & York Developments Limited, 416-862-5324/ CO: Olympia & York Developments Limited ST: Ontario IN: FIN SU: RCN

AH-PO -- NY076 -- 6210 10/28/92 16:21 EST
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Date:Oct 28, 1992

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