Lakeview Hotel Investment Corp. Announces Intention to Extend Maturity Date of Series C and Series D Debentures and Other Amendments

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WINNIPEG, June 26, 2019 / CNW / – Lakeview Hotel Investment Corp (“LHIC“) today announced 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 with the Series C Debentures, the”Debentures“). LHIC has prepared and will send to holders Series C Debentures (the”Series C Debentureholders“) and the Series D Debentures (the”Series D Debentureholders“) a common information circular (the”Circular“) and a form of proxy and consent for the meeting of holders of Series C Debentures (the”Series C reunion“), during which the holders of Series C Debentures will vote on whether or not to accept the amendments to the Series C Debentures, and a form of proxy and consent relating to the meeting of holders of Series D Debentures (the “Series D meeting“), at which the holders of Series D Debentures will vote on whether or not to accept the Amendments to the Series D Debentures. Each of the Series C and Series D meetings will be held on July 25, 2019.

LHIC wishes to modify the debentures as it is refinancing certain debts and modifying certain covenants. LHIC does not currently have the cash resources available to repay the Series C Debentures or the Series D Debentures when they fall due and to make interest payments on the due date when due. The ability of the Company to achieve its current business strategy and establish adequate working capital depends, among other things, on the successful resolution of the upcoming maturity of these debentures until August 31, 2022.

At the Series C Meeting, holders of Series C Debentures will be invited to approve the following amendments (the “Series C Modifications“) to the Series C Debentures:

  • Extension the maturity date of the Series C Debentures from August 22, 2019 To August 31, 2022;
  • Amend the covenants in Section 6.04 (b) of the Series C Indenture by allowing the Company to pay Lakeview Management Inc. for expenses incurred in the ordinary course of business with funds generated from operations of the Company, provided that the Company does not pay a fee to Lakeview Management Inc. on the proceeds from the sale or refinancing of any of the assets of the Company, unless all amounts due under the terms of the debentures of Series C and Series D have only been paid.
  • Including two additional covenants under Section 6 of the Series C Indenture:
    • The first being a new section 6.18 requiring the Company to refinance its unpaid debt to the current holder of the senior security (as defined in the Series C indenture) into December 31, 2019.
    • The second being a new section 6.19 requiring the Company, prior to the Maturity Date, to do its best commercially to pay all amounts due under the Series C Debentures and under the Series D Debentures as soon as possible, which the Company recognizes 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 need to enter into an additional Indenture with the Series C Debenture Trustee, BNY Trust Company of Canada. It is expected that the C Series Amendments will come into effect 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.

If LHIC receives the written consent of the Series C Debentureholders holding at least 66â…”% 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, holders of Series D Debentures will be asked to approve the following amendments (the “D series modifications“) to the Series D Debentures:

  • Extension the maturity date of the Series D Debentures from August 22, 2019 To August 31, 2022;
  • Amend the covenants in Section 6.04 (b) of the Series D Indenture by authorizing the Company to pay Lakeview Management Inc. expenses incurred in the ordinary course of business with funds generated from the activities of the Company, provided that the Company does not pay a fee to Lakeview Management Inc. on the proceeds received from the sale or refinancing of any of the Company’s assets, unless all amounts due under the terms of the Debentures of Series C and Series D Debentures have not been paid.
  • Including two additional covenants under Section 6 of the Series D Indenture:
    • The first being a new section 6.18 requiring the Company to refinance its unpaid debt to the current holder of the senior security (as defined in the Series D indenture) into December 31, 2019.
    • The second being a new section 6.19 requiring the Company, before the Maturity Date, to make commercially reasonable efforts to pay all amounts due under the Series C Debentures and under the Series D Debentures as soon as possible, what the Company recognizes 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 active.

In order to effect the Series D Amendments, LHIC will need to enter into an additional Indenture with the Series D Debenture Trustee, BNY Trust Company of Canada. It is expected that the D-Series changes will come into effect 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.

If LHIC receives the written consent of holders of Series D Debentures holding at least 66â…”% 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 the services of Wellington-Altus Private Wealth to act as solicitation agent. Wellington-Altus Private Wealth will be soliciting votes on the Series C and Series D changes.

There are $ 18,326,000 principal amount of Series C Debentures issued and outstanding, and there are $ 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 symbol “LHR.DB.C” and the Series D Debentures are listed on the TSX Venture Exchange under the 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 the ownership, management and licensing of hotel properties.

Neither the TSX Venture Exchange nor its Regulation Services 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

For more information: Avrum Senensky, Executive Vice President, Tel. : (204) 947-1161, Fax: (204) 957-1697, Email [email protected]

Related links

http://www.lakeviewhotels.com


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