DALLAS and TORONTO, Nov. 18, 2019 /CNW/ -- NexPoint Hospitality Trust (TSXV: NHT.U, "NHT") announced today that it is undertaking a marketed underwritten public equity offering (the "Offering"), in which it intends to sell a minimum of US$50 million of subscription receipts ("Subscription Receipts") under its short form base shelf prospectus dated November 15, 2019 (the "Base Shelf Prospectus"). The net proceeds of the offering will be used to partially fund the acquisition of Condor Hospitality Trust, Inc. (the "Acquisition"), which was previously announced on July 22, 2019. National Bank Financial Inc. is acting as bookrunner in connection with the Offering, which will be conducted through a syndicate of underwriters.
"NHT is very excited to announce this public equity offering, the proceeds of which will be used to fund an accretive acquisition that will contribute further growth and add additional scale to our existing portfolio," commented NHT's Chief Executive Officer, James Dondero. "The Offering is expected to significantly increase NHT's public float and enhance trading liquidity."
The Offering will be priced in the context of the market with the number and pricing of the Subscription Receipts to be determined at the time of pricing. There can be no assurance as to whether or when the Offering will be completed, or as to the actual size or terms of the Offering.
NHT intends to use the net proceeds from the Offering to partially finance the Acquisition. If the Offering results in insufficient proceeds being raised to fund the Acquisition, funds affiliated with NexPoint Advisors, L.P. (collectively "NexPoint") will acquire from treasury Class B Units of NHT's operating partnership, NHT Operating Partnership, LLC, as per the previously announced equity commitment made in connection with the Acquisition (the "Equity Commitment"). NexPoint expects that prior to the closing of the Acquisition it will acquire a minimum of US$25 million of Class B Units, on the same terms as the Offering.
NHT expects to grant the underwriters an over-allotment option, exercisable in whole or in part up to 30 days after closing of the Offering, to purchase up to an additional 15% of the number of Subscription Receipts sold under the Offering, on the same terms and conditions.
Each Subscription Receipt represents the right of the holder to receive, upon closing of the Acquisition, without payment of additional consideration, one trust unit of NHT plus an amount per trust unit equal to the amount per trust unit of NHT of any distributions for which record dates have occurred during the period from the closing date of the Offering to the date immediately preceding the closing date of the Acquisition, less withholding taxes, if any. The Subscription Receipts will be offered in each of the provinces of Canada, except Québec, pursuant to a final prospectus supplement to the Base Shelf Prospectus, and may also be offered by way of private placement in the United States to "qualified institutional buyers". The terms of the Offering will be described in the final prospectus supplement.
Copies of the final prospectus supplement, following filing thereof, and accompanying Base Shelf Prospectus may be obtained on NHT's profile on SEDAR at www.sedar.com. The Base Shelf Prospectus contains, and the final prospectus supplement will contain, important information about NHT and the Offering. Prospective investors should read the final prospectus supplement and accompanying Base Shelf Prospectus and the other documents NHT has publicly filed on SEDAR before making an investment decision.
Closing of the Offering is subject to customary closing conditions, including listing of the Subscription Receipts on the TSXV, and any other required approvals.
About NexPoint Hospitality Trust
NexPoint Hospitality Trust is a publicly traded real estate investment trust, with its units listed on the TSX Venture Exchange under the ticker NHT.U. NHT is focused on acquiring, owning and operating well located hospitality properties in the United States that offer a high current yield and in many cases, that are underperforming assets with the potential to increase in value through investments in capital improvements, a market-based recovery, brand repositioning, revenue enhancements, operational improvements, reducing expense inefficiencies, and exploiting excess land or underutilized space. NHT owns 11 branded properties sponsored by Marriott, Hilton and InterContinental Hotels Group, located across the U.S., specifically in the Seattle, Portland, Dallas, Nashville and St. Petersburg markets. NHT is externally advised by NexPoint Real Estate Advisors VI, L.P. For more information, visit www.nexpointhospitality.com.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may cause actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. In particular, the expectation that NHT will complete the Offering and the Acquisition and the anticipated size of the Offering and Equity Commitment constitute forward-looking information.
Forward-looking information contained in this press release is based on certain key expectations and assumptions made by NHT, including, without limitation, the ability of NHT to successfully market the Offering and a reasonably stable North American economy and stock market. Although the forward-looking information contained in this press release is based upon what NHT's management believes to be reasonable assumptions, NHT cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in NHT's final prospectus dated March 27, 2019, Management's Discussion and Analysis dated August 27, 2019 and Base Shelf Prospectus, which are available on SEDAR (www.sedar.com).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE NexPoint Hospitality Trust