WINNIPEG, Dec. 30, 2016 /CNW/ - Lakeview Hotel Investment Corp ("LHIC") announces that it has amended its credit agreement with a syndicate of lenders led by Alberta Treasury Branches and including Business Development Bank of Canada (BDC) and Roynat Capital. The credit agreement, which was announced by press release on August 25, 2014, provided for a facility of $48 million and was for a five year term. The credit agreement has previously been amended by a first amending agreement dated as of December 23, 2015 and by a second amending agreement dated as of October 19, 2016.
Pursuant to a third amending agreement, the lenders have agreed, among other things, to defer certain loan schedule repayments, to provide for the sale of certain assets, and to amend certain financial covenants of LHIC.
Pursuant to the terms of its amended credit facility, LHIC has entered into a loan agreement (the "Loan Agreement") with Lakeview Management Inc. ("LMI"), pursuant to which LMI has agreed to provide a credit facility in the amount of $360,000.00 to LHIC, which will be paid by LMI to LHIC in six equal tranches of $60,000.00 per month, the first payment being paid on the date hereof. The sums advanced under the Loan Agreement shall bear interest at a rate of 10% per annum, calculated annually, and the loan and any accrued interest will be repayable on demand after the maturity date subject to limitations on its repayment contained in the credit agreement, as amended.
LMI is a "related party" of LHIC as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), and the loan from LMI to LHIC is a "related party transaction" as defined in MI 61-101. LHIC is exempt from the minority shareholder approval requirement of MI 61-101 because the loan from LMI to LHIC is on reasonable commercial terms that are not less advantageous to LHIC than if the loan were obtained from a person dealing at arm's length with LHIC, and the loan is not convertible, directly or indirectly into equity or voting securities of LHIC or a subsidiary entity of LHIC, or otherwise participating in nature, or repayable as to principal or interest, directly or indirectly, in equity or voting securities of LHIC or a subsidiary entity of LHIC.
The proceeds of the loan are expected to be used by LHIC for working capital and general corporate purposes.
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
For further information: Avrum Senensky, Executive Vice President, Tel: (204) 947-1161, Fax: (204) 957-1697, Email [email protected]