WINNIPEG, June 26, 2019 /CNW/ - Lakeview Hotel Investment
Corp ("LHIC") announced today its intention to amend the
terms of its outstanding Series C Redeemable Subordinated
Debentures (the "Series C Debentures") and its outstanding
Series D Redeemable Subordinated Debentures (the "Series D
Debentures", and together with the Series C Debentures, the
"Debentures"). LHIC has prepared and will send to
holders of the Series C Debentures (the "Series C
Debentureholders") and the Series D Debentures (the "Series
D Debentureholders") a joint information circular (the
"Circular") and a proxy and consent form relating to the
meeting of the Series C Debentureholders (the "Series C
Meeting"), at which the Series C Debentureholders will vote on
whether to accept the amendments to the Series C Debentures, and a
proxy and consent form relating to the meeting of the Series D
Debentureholders (the "Series D Meeting"), at which the
Series D Debentureholders will vote on whether to accept the
amendments to the Series D Debentures. Each of the Series C Meeting
and the Series D Meeting will be held on July 25, 2019.
LHIC wishes to amend the Debentures as it has been in the
process of refinancing certain debt and amending certain debt
covenants. LHIC does not currently have the cash resources
available to repay the Series C Debentures or the Series D
Debentures when they mature and to make the interest payments on
the Maturity Date when due. The Corporation's ability to
realize its current business strategy and to establish adequate
working capital is contingent on, among other things, a successful
resolution of the upcoming maturing of such debentures until
August 31, 2022.
At the Series C Meeting, the Series C Debentureholders will be
asked to approve the following amendments (the
"Series C Amendments") to the Series C
Debentures:
- Extending the maturity date of the Series C
Debentures from August 22, 2019 to
August 31, 2022;
- Amending the restrictive covenants in Section 6.04(b) of the
Series C Indenture by allowing the Corporation to pay fees to
Lakeview Management Inc. incurred in the normal course of business
using funds generated through the Corporation's operations provided
that the Corporation will not pay fees to Lakeview Management Inc.
out of proceeds received from the sale or refinance of any of the
Corporation's assets, unless all amounts owing pursuant to the
Series C Debentures and the Series D Debentures have been paid.
- Including two additional restrictive covenants under Section 6
of the Series C Trust Indenture:
-
- The first being a new Section 6.18 requiring that the
Corporation refinance its outstanding indebtedness owing to the
current holder of Senior Security (as defined in the Series C Trust
Indenture) by December 31, 2019.
- The second being a new Section 6.19 requiring that the
Corporation will, prior to the Maturity Date, make commercially
reasonable best efforts to pay all amounts owing pursuant to the
Series C Debentures and pursuant to the Series D Debentures as soon
as possible, which the Corporation acknowledges and agrees may
include raising additional funds in the public market, refinancing
the Series C Debentures with a new lender, and/or selling some or
all of its assets.
In order to effect the Series C Amendments, LHIC will be
required to enter into a supplemental trust indenture with the
trustee for the Series C Debentures, BNY Trust Company of
Canada. It is anticipated that the
Series C Amendments will be effective on or about July 26, 2019. Further information regarding the
Series C Amendments will be available in the Circular, which will
be filed on SEDAR.
In the event that LHIC receives the written consent of Series
C Debentureholders holding at least 66⅔% of the principal amount of
the Series C Debentures prior to the Series C Meeting, the Series C
Amendments will be approved and LHIC will cancel the Series C
Meeting.
At the Series D Meeting, the Series D Debentureholders will be
asked to approve the following amendments (the "Series D
Amendments") to the Series D Debentures:
- Extending the maturity date of the Series D
Debentures from August 22, 2019 to
August 31, 2022;
- Amending the restrictive covenants in Section 6.04(b) of the
Series D Indenture by allowing the Corporation to pay fees to
Lakeview Management Inc. incurred in the normal course of business
using funds generated through the Corporation's operations provided
that the Corporation will not pay fees to Lakeview Management Inc.
out of proceeds received from the sale or refinance of any of the
Corporation's assets, unless all amounts owing pursuant to the
Series C Debentures and the Series D Debentures have been paid.
- Including two additional restrictive covenants under Section 6
of the Series D Trust Indenture:
-
- The first being a new Section 6.18 requiring that the
Corporation refinance its outstanding indebtedness owing to the
current holder of Senior Security (as defined in the Series D Trust
Indenture) by December 31, 2019.
- The second being a new Section 6.19 requiring that the
Corporation will, prior to the Maturity Date, make commercially
reasonable best efforts to pay all amounts owing pursuant to the
Series C Debentures and pursuant to the Series D Debentures as soon
as possible, which the Corporation acknowledges and agrees may
include raising additional funds in the public market, refinancing
the Series D Debentures with a new lender, and/or selling some or
all of its assets.
In order to effect the Series D Amendments, LHIC will be
required to enter into a supplemental trust indenture with the
trustee for the Series D Debentures, BNY Trust Company of
Canada. It is anticipated that the
Series D Amendments will be effective on or about July 26, 2019. Further information regarding the
Series D Amendments will be available in the Circular, which will
be filed on SEDAR.
In the event that LHIC receives the written consent of Series
D Debentureholders holding at least 66⅔% of the principal amount of
the Series D Debentures prior to the Series D Meeting, the Series D
Amendments will be approved and LHIC will cancel the Series D
Meeting.
LHIC has retained Wellington-Altus Private Wealth to act as
soliciting agent. Wellington-Altus Private Wealth will solicit
votes regarding the Series C Amendments and the Series D
Amendments.
There is $18,326,000 principal
amount of Series C Debentures issued and outstanding, and there is
$10,180,000 principal amount of
Series D Debentures issued and outstanding. The Series C Debentures
are listed on the TSX Venture Exchange under the trading symbol
"LHR.DB.C", and the Series D Debentures are listed on the TSX
Venture Exchange under the trading symbol "LHR.DB.D".
Lakeview Hotel Investment Corp. is listed on the TSX Venture
Exchange under the symbol "LHR". Lakeview Hotel Investment Corp.
receives income from ownership, management and licensing of hotel
properties.
The TSX Venture Exchange nor its Regulation Service Provider
(as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Lakeview Hotel Investment Corp