SIR Corp. announces additional debt financing

BURLINGTON, ON, Aug. 28, 2013 /CNW/ - SIR Corp. ("SIR"), which has a number of agreements and interests related to SIR Royalty Income Fund (the "Fund") (TSX:  SRV.UN), announced today that it has entered into a Second Amended and Restated Loan Agreement (Loan Agreement) with its existing senior lender GE Capital to add a new $4.0 million Tranche B Development Loan to the existing $12.0 million Tranche A Development Loan and the existing $26.0 million Term Loan. Under the terms of the Loan Agreement, the term of the Tranche B Development Loan will be coterminous with the existing facilities (November 14, 2016). Additionally, under the terms of the Loan Agreement, Tranche B is intended to be drawn by October 10, 2013.  Such date can be extended until April 10, 2014, at the sole discretion of GE Capital. A copy of the Amendment will be filed on SEDAR.

The Tranche B Development Loan is available to enable SIR to finance: (a) costs incurred in connection with the acquisition of furniture, fixtures, equipment and leasehold improvements relating to new locations, and (b) renovations and capital expenditure costs relating to existing locations.

Peter Fowler, President and CEO of SIR Corp., stated: "This additional senior debt with GE Capital further enhances our flexibility to finance prudent growth through the development of new corporately owned restaurants, as well as renovation programs for our existing restaurants. We expect that new restaurant growth and renovations of existing restaurants, as market conditions permit, will benefit both SIR Corp. and, ultimately, the unitholders of the Fund."

The financial covenants applicable to SIR, including a minimum fixed charge coverage ratio and senior debt leverage ratio, remain the same. The loan is secured by substantially all of the assets of SIR and most of its subsidiaries, which are also guarantors. The SIR Royalty Limited Partnership (the "Partnership") and the Fund have not guaranteed the loan, but have, as contemplated in  existing agreements, agreed to continue to subordinate and postpone their claims against SIR to the claims of GE Capital.

About SIR Corp.

SIR Corp. (SIR) is a privately held Canadian corporation that owns and operates a portfolio of 54 restaurants in Canada. SIR's Concept brands include: Jack Astor's Bar and Grill®, with 37 locations; Alice Fazooli's®, together with Scaddabush™, for a total of four locations; and Canyon Creek Chop House®, with eight locations. SIR also operates one-of-a-kind "Signature" brands in downtown Toronto, which comprise the upscale Reds® Wine Tavern, Far Niente®/FOUR®/Petit Four®, and the Loose Moose Tap & Grill®. All trademarks related to the Concept and Signature brands noted above are used by SIR under a License and Royalty Agreement with SIR Royalty Limited Partnership in consideration for a Royalty, payable by SIR to the Partnership, equal to six percent of the revenue of the 49 restaurants currently included in the Royalty pool. SIR also owns and operates two seasonal Signature restaurants: Abbey's Bakehouse™ and Duke's Refresher™. These two restaurants are not currently part of Royalty Pooled Restaurants. For more information on SIR or the SIR Royalty Income Fund, please visit www.sircorp.com.

About SIR Royalty Income Fund  

The Fund is a trust governed by the laws of the province of Ontario that receives distribution income from its investment in the SIR Royalty Limited Partnership and interest income from the SIR Loan. The Fund intends to pay distributions to unitholders on a monthly basis.

Caution concerning forward-looking statements

Certain statements contained in this report, or incorporated herein by reference, including the information set forth as to the future financial or operating performance of the Fund or SIR, that are not current or historical factual statements may constitute forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements concerning the objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and the business, operations, financial performance and condition of the Fund, the SIR Holdings Trust (the "Trust"), the Partnership, SIR, the SIR Restaurants or industry results, are forward-looking statements. The words "may", "will", "would", "expect", "believe", "plan", "anticipate", "intend", "estimate" and other similar terminology and the negative of such expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Fund, the Trust, the Partnership, SIR, the SIR Restaurants or industry results, to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. These statements reflect Management's current expectations, estimates and projections regarding future events and operating performance and speak only as of the date of this document. Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. Risks related to forward-looking statements include, among other things, challenges presented by a number of factors, including: competition; changes in demographic trends; changing consumer preferences and discretionary spending patterns; changes in consumer confidence; changes in national and local business and economic conditions; changes in availability of credit; legal proceedings and challenges to intellectual property rights; dependence of the Fund on the financial condition of SIR; legislation and governmental regulation; accounting policies and practices; and the results of operations and financial condition of SIR. The foregoing list of factors is not exhaustive. Many of these issues can affect the Fund's or SIR's actual results and could cause their actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Fund or SIR.  Given these uncertainties, readers are cautioned that forward-looking statements are not guarantees of future performance, and should not place undue reliance on them. The Fund and SIR expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward looking statements. Forward-looking statements are based on Management's current plans, estimates, projections, beliefs and opinions, and the Fund and SIR do not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except as expressly required by applicable securities laws.

In formulating the forward-looking statements contained herein, Management has assumed that business and economic conditions affecting SIR's restaurants and the Fund will continue substantially in the ordinary course, including without limitation with respect to general industry conditions, competition, general levels of economic activity (including in downtown Toronto), regulations (including those regarding employees, food safety, tobacco and alcohol), weather, taxes, foreign exchange rates and interest rates, that there will be no pandemics or other material outbreaks of disease or safety issues affecting humans or animals or food products, and that there will be no unplanned material changes in its facilities, equipment, customer and employee relations, or credit arrangements. These assumptions, although considered reasonable by Management at the time of preparation, may prove to be incorrect.  In particular, Management has assumed that the tax effects on distributions will remain consistent with current regulations or pronouncements, and also in estimating the revenue for new restaurants, Management has assumed that they will operate consistent with other similar SIR restaurants. For more information concerning the Fund's risks and uncertainties, please refer to the March 28, 2013 Annual Information Form, for the period ended December 31, 2012, which is available under the Fund's profile at www.sedar.com.

All of the forward-looking statements made in this report are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Fund or SIR.

This document is being placed on www.sedar.com by SIR Corp. on a voluntary basis. It is not being placed by, or with the approval of, or on behalf of the SIR Royalty Income Fund, or any of its trustees or officers, or by SIR GP Inc., or SIR Holdings Trust, or their respective trustees, managing general partners, directors or officers, has not been approved by any of them, and is not to be regarded as a document placed, filed, furnished or submitted by, or on behalf of any of them, or by anyone with actual, implied or apparent authority to act on behalf of any of them. None of them has approved, authorized, permitted or acquiesced to the contents of this document.

SOURCE: SIR Royalty Income Fund

Jeff Good
Chief Financial Officer
Tel: [phone]

Bruce Wigle
BMIR Investor Relations
Tel: [phone] ext. 232