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HALIFAX, May 31, 2007 (Canada NewsWire via COMTEX News Network) -- /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
UNITED STATES/
Holloway Lodging Real Estate Investment Trust ("Holloway" or the "REIT") today announced that it has entered into an agreement with a syndicate of underwriters led by Canaccord Capital Corporation to issue to the public on a bought deal basis, 17,758,000 Units from treasury at a price of $5.35 per Unit (the "Units") for gross proceeds of $95,005,300 and $45,000,000 of 6.50% Convertible Unsecured Subordinated Debentures (the "Debentures", and collectively with the Units, the "Securities"). The Debentures will have a maturity date of June 30, 2012 and a conversion price of $6.15 per unit (162.6 units per $1,000 principal amount of Debentures). Holloway has also granted the underwriters an over-allotment option to purchase, at any time up to 30 days following completion of the offering, an additional number of Securities at the same price as under the offering in an amount equal to up to 15% of the gross proceeds of the offering.
Holloway intends to use the net proceeds from the offering to fund a portion of the purchase price for its previously announced acquisition of 11 hotels and associated properties located in British Columbia and Alberta (the "Acquired Properties"), to pay expenses related to such acquisitions, to fund its mezzanine lending and capital programs and for working capital purposes. The acquisition of the Acquired Properties by Holloway and the terms associated therewith are described in more detail in Holloway's press release dated May 30, 2007.
The Securities will be offered pursuant to a short form prospectus to be filed in all the provinces of Canada. Closing of the offering is expected to occur on or about June 21, 2007 and is subject to regulatory approvals.
The Units have not been registered under the US. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
About Holloway
Holloway Lodging REIT is a real estate investment trust listed as a Tier 2 issuer on the TSX Venture Exchange with the objective of acquiring and maintaining a growing portfolio of lodging properties with stable cash distributions.
This press release contains forward-looking information within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by terms such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward looking-information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what the REIT currently expects and there can be no assurance that such statements will prove to be accurate. Some of these risks and uncertainties are described under "Risk Factors" in the REIT's annual information form dated May 1, 2007. Other risks and uncertainties include the risk that the REIT may not be able to complete the proposed acquisition of the Acquired Properties or the financing described herein.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
SOURCE: Holloway Lodging Real Estate Investment Trust
Mr. Glenn Squires, Chief Executive Officer or Ms. Tracy Sherren, Chief Financial
Officer, (902) 457-1907
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