This represents an aggregate value of about $346.9 million. The company will not receive any of the proceeds from the resale, which can take place "from time to time," according to the filing. No underwriters are listed in the registration.
The selling shareholders named in the SEC document either currently own the shares they are offering or may acquire them by converting their units of limited partnership interest in GMH Communities LP, the company's operating partnership, into common stock. The offer consists of approximately 31.6 million shares issuable upon conversion of limited partnership interests and about 2.5 million shares that are currently outstanding.
Among the selling shareholders named in the SEC document are Gary Holloway Sr., chairman and CEO of the locally based student and military housing REIT, who has nearly 17 million shares, and Vornado Realty Trust with just over 9.8 million shares. The SEC filing lists numerous risk factors associated with shares of the company's common stock.
The factors include the June 7, 2007 maturity date of the company's line of credit with Wachovia Bank, which the filing says may be extended to no later than this Oct. 2. If it is not repayed, the loss of any assets securing the debt could have an adverse affect. As of April 13, the outstanding balance was $89.7 million.
Other risks include any potential default on mortgage debt, pending litigation and a potential SEC investigation. The company is defending itself against the several class action suits that have been filed against the company, its CEO and former CFO, as GlobeSt.com previously reported. Yet, costs of the defense and any judgments resulting from the suits could have an adverse affect.
If the SEC turns its informal inquiry about the company's own 2006 audit committee investigation into a formal SEC investigation, GMH could face difficulty in accessing capital, the filing states. In addition, GMH could suffer civil penalties, fines or sanctions in addition to the costs of responding to such an investigation.
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