WINNIPEG, May 30, 2014 /CNW/ - All in West! Capital
Corporation (the "Corporation") (TSX-V: ALW) is pleased to announce
that it has reached an agreement with the mortgage lender (the
"Lender") secured by the Econolodge Inn & Suites in
Hinton, Alberta (the "Econolodge")
to restructure the terms of the existing mortgage (the "Econolodge
Mortgage"), effective June 1,
2014.
Under the agreement: (i) effective June
1, 2014, the principal amount of the Econolodge Mortgage
will be reduced by approximately $2,000,000 from $6,494,819 to $4,500,000; (ii) the Corporation will only be
required to make interest only payments until the expiry of the
term, which will be May 31, 2017;
(iii) the interest rate will be 7.5% per annum.
In exchange for the approximately $2
million of debt forgiveness, the Lender will have the right
to purchase the property for $4,500,000 at any time on or prior to
May 31, 2017. The Econolodge was
appraised by an independent third party appraiser at $4.13 million as at December 31, 2013.
"The restructuring of the Econolodge mortgage debt has been our
top priority. We believe that the debt restructuring is very
positive for the Corporation and its shareholders and other
stakeholders." reported Cornelius
Martens, President and Chief Executive Officer of the
Corporation. "In addition to improving our balance sheet as a
result of $2 million in debt
forgiveness, the debt restructuring reduces our annual interest
costs by approximately $79,000, which
is positive for our corporate cash flow."
The Corporation expects to continue to evaluate alternatives
available to it. The Corporation continues to be in default
of all of its debt obligations, other than the Econolodge mortgage,
including:
(i)
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the obligation to
repay the principal amount on the Series A convertible debentures
(the "Series A Debentures") in the aggregate principal amount of
$6,495,000 on March 31, 2012 and the obligation to make interest
payments on the Series A Debentures since April 30,
2010;
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(ii)
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the obligation to
repay the principal amount on the Series B convertible debentures
(the "Series B Debentures") in the aggregate principal amount of
$1,180,000 on September 30, 2012 and the obligation to make
interest payments on the Series B Debentures since April 30,
2010;
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(iii)
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the obligation to
repay the principal amount on the Series C convertible debentures
(the "Series C Debentures") in the aggregate principal amount of
$2,353,750 on October 1, 2012 and the obligation to make interest
payments on the Series C Debentures since November 30,
2010;
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(iv)
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the "cross-default"
covenants under its mortgage financing and security documents
relating to the Phase I Grande Cache and Phase II Grande Cache
hotels in Grande Cache, Alberta. The outstanding mortgage
balances as at June 1, 2014 for such properties are $7,393,623 in
respect of the Phase I property and $4,096,401 in respect of the
Phase II property.
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In 2010, the Corporation announced an action plan to reduce
corporate costs. Measures taken since then include: the waiving of
asset management fees; the waiving of director fees; ceasing
interest payments to the holders of Series A Debentures, Series B
Debentures and Series C Debentures; non-repayment of the Series A
Debentures, Series B Debentures and Series C Debentures at their
respective maturity dates; selling the formerly owned Days Inn
Hinton and receiving approximately $1.2
million of debt forgiveness; and now the restructuring of
the Econolodge mortgage and the receiving of approximately
$2 million of debt forgiveness.
The TSX Venture Exchange has not reviewed or approved the
contents of this press release.
Forward-Looking Statements
This press release contains forward-looking statements. For
this purpose, any statements contained herein that are not
statements of historical fact may be deemed to be forward-looking
statements. Particularly, statements regarding the Corporation's
future operating results, performance and achievements are
forward-looking statements. Without limiting the foregoing, the
words "expects", "anticipates", "intends", "estimates", "projects",
and similar expressions are intended to identify forward-looking
statements.
The Corporation is subject to significant risks and
uncertainties which may cause the actual results, performance or
achievements of the Corporation to be materially different from any
future results, performance or achievements expressed or implied in
these forward-looking statements. Such risk factors include, but
are not limited to, the impact of general economic conditions,
industry conditions, interest rate fluctuations, tax-related risk
factors, governmental regulation, environmental risks, competition
from other industry participants, stock market volatility, the
ability to access sufficient capital from internal and external
sources and the risk of fluctuation and variation in actual
operating results, which variation may be material. The
Corporation cannot assure investors that actual results will be
consistent with any forward-looking statements and the Corporation
assumes no obligation to update or revise such forward-looking
statements to reflect actual events or new circumstances. All
forward-looking statements contained in this press release are
qualified by this cautionary statement.
SOURCE All in West! Capital Corporation