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HALIFAX, Jul 21, 2009 (Canada NewsWire via COMTEX) -- Holloway Lodging Real Estate Investment Trust (TSX: HLR.UN, HLR.DB, HLR.DB.A) ("Holloway" or the "REIT") announced today that due to the ongoing economic downturn it is suspending its monthly distributions effective immediately. As a result there will be no distribution for the month of July 2009, which would have otherwise been payable on August 14, 2009.
On November 13, 2008, Holloway announced a reduction in monthly distributions due to the mounting challenges posed by the worsening economy at that time. Since then, market and economic conditions have continued to deteriorate, negatively affecting the hotel industry as a whole. Holloway has not been immune to these conditions, which have significantly affected levels of business and cash flow from operations. As the timing and extent of any improvement remains uncertain, Holloway's board of trustees has determined that it is prudent and in the best interests of the REIT to suspend distributions.
"The ongoing economic downturn has presented a number of challenges to the Canadian and global tourism and hospitality industry," said Glenn Squires, CEO of Holloway. "Faced with the current uncertainty regarding the outlook for our industry, our board of trustees has determined that the REIT and its unitholders would be best served by taking additional steps to conserve cash and strengthen the REIT's balance sheet. The suspension of distributions will allow Holloway to retain additional capital, meet all of its ongoing obligations, strengthen the balance sheet, take advantage of strategic initiatives and position us to improve unitholder value as conditions improve."
"Holloway has consistently proven to be an industry leader in the areas of RevPAR, market share penetration and profit margin and we fully expect the REIT will continue to maintain its leadership position in these areas. Our hotels are well positioned in their respective markets, have strong brand affiliation with major franchisors such as InterContinental Hotels Group, Wyndham Worldwide, Carlson Hotels Worldwide and Best Western International, Inc. and, as the majority were built recently, do not have significant capital expenditure requirements. In addition, the REIT does not have significant debt maturing in the near term. We believe Holloway is well positioned to deal with the current environment and the board of trustees intends to revisit Holloway's distribution policy periodically, with a view to restoring distributions at the appropriate time."
About Holloway
Holloway is a real estate investment trust focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway currently owns 22 hotels with 2,423 rooms. Holloway's units and convertible debentures trade on the Toronto Stock Exchange under the symbols HLR.UN, HLR.DB and HLR.DB.A, respectively.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to the REIT's future outlook and anticipated events or results and may include statements regarding the future financial position, property acquisition strategies and opportunities, business strategy, financial results and plans and objectives of the REIT. Particularly, statements regarding the expected benefits of the REIT's suspension of monthly distributions, the potential reinstatement of distributions and the REIT's ability to enhance unitholder value are forward-looking statements. 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 Holloway's annual information form dated March 30, 2009 which is available at www.sedar.com. The REIT does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
%SEDAR: 00023845E
SOURCE: Holloway Lodging Real Estate Investment Trust
Mr. Glenn Squires, Chief Executive Officer, Mr. Michael Jackson, President and Chief
Operating Officer or Ms. Tracy Sherren, Chief Financial Officer, (902) 404-3499
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