WINNIPEG, Oct. 28, 2016 /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 November 28, 2016.
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 regularly scheduled
interest payments thereon. 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 and
deferring interest payments until August 22,
2019.
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 June 30, 2017 to
August 22, 2019;
- Changing the interest rate payable on the Series C Debentures
from 8.0% per annum to 7.0% per annum;
- Changing the payment of interest from being payable
semi-annually to being payable along with any outstanding principal
at the maturity date;
- Including two additional restrictive covenants to Section 6.04
of the Series C Trust Indenture:
- the first being to restrict the payment of deferred fees by
LHIC to Lakeview Management Inc. that would reduce the deferred fee
balance owing to Lakeview Management Inc. to under $3.1 million until such time as all accrued and
unpaid interest on the Series C Debentures has been paid to the
Series C Debentureholders. In connection with the foregoing,
LHIC acknowledges that any of the $3.1
million deferred fees referred to above outstanding as of
the maturity date (as amended above) are subordinate to repayment
of the principal amount outstanding under the Series C Debentures
along with any accrued and unpaid interest payable thereon;
and
- the second to provide that LHIC may not increase the principal
amount of senior debt (other than in connection with LHIC's hotel
in Prince George, British
Columbia) beyond the amount outstanding as at the date of
the third supplemental indenture unless either (i) Series C
Debentureholder approval has been obtained or (ii) the amount in
excess of such principal amount is used to pay down the accrued
interest and principal on the Series C Debentures and LHIC's Series
D Redeemable Subordinated Debentures on a pro rata basis.
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, CIBC Mellon Trust Company. The
Series C Amendments will be effective on or about November 29, 2016. 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 May 31, 2018 to
August 22, 2019;
- Changing the interest rate payable on the Series D Debentures
from 9.0% per annum to 7.0% per annum;
- Changing the payment of interest from being payable
semi-annually to being payable along with any outstanding principal
at the maturity date; and
- Including two additional restrictive covenants to Section 6.04
of the Series D Trust Indenture:
- the first being to restrict the payment of deferred fees by
LHIC to Lakeview Management Inc. that would reduce the deferred fee
balance owing to Lakeview Management Inc. to under $3.1 million until such time as all accrued and
unpaid interest on the Series D Debentures has been paid to the
Series D Debentureholders. In connection with the foregoing,
LHIC acknowledges that any of the $3.1
million deferred fees referred to above outstanding as of
the maturity date (as amended above) are subordinate to repayment
of the principal amount outstanding under the Series D Debentures
along with any accrued and unpaid interest payable thereon;
and
- the second to provide that LHIC may not increase the principal
amount of senior debt (other than in connection with LHIC's hotel
in Prince George, British
Columbia) beyond the amount outstanding as at the date of
the third supplemental indenture unless either (i) Series D
Debentureholder approval has been obtained or (ii) the amount in
excess of such principal amount is used to pay down the accrued
interest and principal on the Series D Debentures and the
Corporation's Series C Redeemable Subordinated Debentures on a pro
rata basis.
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, CIBC Mellon Trust Company. The
Series D Amendments will be effective on or about November 29, 2016. 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 Laurentian Bank Securities to act as
soliciting agent. Laurentian Bank Securities 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
$10,160,000 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