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

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

Avrum Senensky, Executive Vice President, Tel: [phone], Fax: [phone], Email [email protected]

Related Links

http://www.lakeviewhotels.com