September 21, 2009 / 9:12 PM / in 8 years

UPDATE 1- InnVest lowers monthly distribution, to raise C$50 mln

* To offer 12.66 mln units at C$3.95 apiece

* Lowers monthly distribution to C$0.417

Sept 21 (Reuters) - InnVest Real Estate Investment Trust INN_u.TO said it would cut its monthly distribution by more than 2 Canadian cents, and said it would raise up to C$50 million on ($46.34 million) on a bought-deal basis.

InnVest said it would pay 4.17 Canadian cents per unit payable on Oct. 15 compared to a monthly distribution of 6.25 Canadian cents in August due to the ongoing economic downturn and its impact on operating performance.

The company said it would use the proceeds from the fundraising to enhance its financial strength and flexibility and for general corporate purposes.

InnVest would issue about 12.66 million units at C$3.95 a unit to a syndicate of underwriters co-led by RBC Capital Markets and Scotia Capital.

Westmont Hospitality Group and/or its affiliates expressed its intention to acquire 5 percent of the units being offered, the company added.

The offering is expected to close by Sept. 25, the company said.

Units of the company closed at C$4.10 Monday on the Toronto Stock Exchange. ($1=1.079 CANADIAN DOLLAR) (Reporting by Amit Kumar in Bangalore; Editing by Maju Samuel)

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