/NOT FOR DISTRIBUTION ON U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
HALIFAX, Jan. 10, 2018 /CNW/ - Holloway Lodging Corporation (TSX: HLC) ("Holloway" or the "Company") announced today that the Toronto Stock Exchange (the "TSX") has approved the Company's notice of intention to make a normal course issuer bid to purchase for cancellation, from time to time, its (i) 6.25% convertible unsecured subordinated debentures with a maturity date of February 28, 2020 ("Series B Debentures", Trading Symbol: HLC.DB) and (ii) 7.50% convertible unsecured subordinated debentures with a maturity date of September 30, 2021 ("Series C Debentures", Trading Symbol: HLC.DB.A).
As of January 10, 2018, the public float of the Series B Debentures is $49,620,000. Holloway intends to purchase for cancellation up to a maximum of $4,962,000 principal amount of the Series B Debentures, being approximately 10% of the public float outstanding on January 10, 2018. Purchases are restricted to a maximum of $9,941 principal amount per day other than block purchase exemptions. As of the date hereof, there is $50,866,000 principal amount of Series B Debentures outstanding and the average daily trading volume during the previous six months was $39,765.
As of January 10, 2018, the public float of the Series C Debentures is $34,105,000. Holloway intends to purchase for cancellation up to a maximum of $3,410,500 principal amount of the Series C Debentures, being approximately 10% of the public float outstanding on January 10, 2018. Purchases are restricted to a maximum of $4,857 principal amount per day other than block purchase exemptions. As of the date hereof, there is $40,565,000 principal amount of Series C Debentures outstanding and the average daily trading volume during the previous six months was $19,427.
The price Holloway will pay for any Debentures will be the prevailing market price of such securities at the time of purchase. The actual number of Debentures that may be purchased for cancellation and the timing of any such purchases will be determined by Holloway. Management of Holloway believes that, from time to time, it is in the best interest of the company to purchase its securities.
Each Bid will commence on January 15, 2018 and will terminate on January 14, 2019 or such earlier time as the Bid is completed or terminated at the option of Holloway. The Purchases may be effected through the facilities of Toronto Stock Exchange and all alternative trading systems.
Pursuant to a previous notice of intention to conduct a normal course issuer bid, under which Holloway sought and received approval from the TSX to purchase up to $4,526,100 principal amount of its Series B Debentures and $3,411,200 principal amount of its Series C Debentures for the period of January 13, 2017 to January 12, 2018, Holloway has purchased, as of January 11, 2018, $1,321,000 principal amount of its Series B Debentures on the open market at an average purchase price of $95.55 and $7,000 principal amount of its Series C Debentures on the open market at an average price of $98.99. As of January 11, 2018, the issued and outstanding principal amount of Series B Debentures is $50,866,000 and the public float of the Series B Debentures is $49,620,000. As of January 11, 2018, the issued and outstanding principal amount of Series C Debentures is $40,565,000 and the public float of the Series C Debentures is $34,105,000.
Automatic Purchase Plan
Holloway has entered into an automatic securities purchase plan (the "Plan") with a broker in order to facilitate purchases of the Debentures under the Bid. Purchases under the Plan will be made by Holloway's broker based on the parameters prescribed by the TSX, applicable Canadian securities laws and the terms of the parties' written agreement. The Plan is intended for the purchase of Debentures only under the Bid. Under the Plan, Holloway's broker may purchase Debentures under the Bid when Holloway would ordinarily not be permitted to, due to its self-imposed regular quarterly blackout periods. The Plan commences on January 15, 2018 and expires with the expiry of the Bid on January 14, 2019.
The Company believes that, on occasion, the Debentures become available at prices that do not give full effect to their underlying value, based solely on management's opinion of the Company's future prospects. Accordingly, management believes that the purchase of Debentures pursuant to the normal course issuer bid represents an investment opportunity for Holloway and an appropriate use of its funds.
ABOUT HOLLOWAY LODGING CORPORATION
Holloway is a real estate corporation 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 owns 33 hotels with 3,764 rooms. Holloway's shares and debentures trade on the TSX under the symbols HLC, HLC.DB and HLC.DB.A.
This press release contains forward-looking information within the meaning of applicable securities laws. Forward-looking information may relate to Holloway's future outlook and anticipated events or results and may include statements regarding Holloway's future financial position, business strategy, financial results, plans and objectives. 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 Holloway 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 for the year ended December 31, 2016 which is available on Holloway's profile on the SEDAR website at www.sedar.com. Holloway does not intend to update or revise any such forward-looking information should its assumptions and estimates change.
SOURCE Holloway Lodging Corporation
For further information: Michael Rapps, Chairman, at (416) 855-1925 or Jane Rafuse, Chief Financial Officer, at (902) 443-5101