Temple Hotels Inc. announces completion of $38 million sale of Hotel Saskatchewan and announces the filing of a preliminary short form prospectus for $40 million rights offering

WINNIPEG, Sept. 2, 2015 /CNW/ - Temple Hotels Inc. ("Temple") (TSX: TPH) today announced that it has completed the previously announced sale of Hotel Saskatchewan (the "Hotel") in downtown Regina, SK for $38 million, subject to customary closing adjustments. The 224 room full-service hotel was acquired by Temple in April 2014 for $32.8 million.

The sale resulted in net cash proceeds to Temple of approximately $17 million, after the repayment of the existing first mortgage loan. The sale agreement also provided for the repayment to Temple by the purchaser of approximately $7 million representing all of the capital expenditures incurred to the closing date with respect to renovating and rebranding the Hotel as an Autograph Collection by Marriott. The aggregate net cash proceeds of approximately $24 million, including the capital expenditure reimbursement, are being used to retire the revolving loan in full, to reduce other debt and to improve working capital. No brokerage commission was payable on the transaction.

Temple also today announced that it has filed a preliminary short form prospectus (the "Preliminary Prospectus") in each of the provinces and territories of Canada, other than the Province of Quebec (the "Eligible Jurisdictions"), in connection with a rights offering (the "Rights Offering") in order to raise up to $40 million of equity capital through the sale of common shares ("Shares"). Temple intends to use the net proceeds of the Rights Offering to further reduce indebtedness, improve working capital and undertake capital expenditures and/or possible acquisitions.

Pursuant to the Rights Offering, Temple will distribute rights ("Rights") to shareholders to subscribe for Shares at a price (the "Exercise Price") per Share which is at a 20% discount to the five-day volume-weighted average price of the Shares on the Toronto Stock Exchange (the "TSX") immediately preceding the date that the (final) short form prospectus in respect of the Rights Offering is filed with applicable securities regulatory authorities.

Each shareholder of record on the record date will receive one Right for each Share held.  Notwithstanding the foregoing, Rights will not be delivered to, nor will they be exercisable by, persons resident outside of the Eligible Jurisdictions; rather, such Rights may be sold on their behalf. The record date, the expiry date and the number of Rights required to purchase one Share will be determined at the time of the filing of the (final) short form prospectus in respect of the Rights Offering. 

Shareholders that fully exercise their Rights will be entitled to subscribe for additional Shares, if available, that were not subscribed for by other holders of Rights. Morguard Corporation, Burgundy Asset Management Ltd., Centennial Group Limited and Arni Thorsteinson (a director and officer of the Corporation) intend to exercise or cause to be exercised their basic subscription privilege in full and may also subscribe for additional Common Shares under the additional subscription privilege.

The Rights will be exercisable for at least 21 days following the date of mailing of the (final) short form prospectus. Temple will apply to list the Rights and the Shares issuable upon the exercise thereof on the TSX. The Rights Offering is subject to regulatory approval, including the approval of the TSX.

In connection with the Rights Offering, Temple has engaged National Bank Financial Inc. as its financial advisor.

Further details concerning the Rights Offering and the procedures to be followed by holders of Shares are contained in the Preliminary Prospectus which is available on Temple's profile at www.sedar.com. 

Temple is a real estate investment company listed on the TSX under the symbols TPH (common shares), TPH.DB.C, TPH.DB.D, TPH.DB.E and TPH.DB.F (convertible debentures). The objective of Temple is to provide shareholders with stable cash dividends from investment in a diversified portfolio of hotel properties and related assets. For further information on Temple, please visit our website at www.templehotels.ca.

This press release contains certain statements regarding the Rights Offering described herein that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. There can be no certainty that the Rights Offering will be completed on the terms described herein or at all.

The TSX has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.

SOURCE Temple Hotels Inc.

For further information: Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Executive Vice President, Tel: (204) 475-9090, Fax: (204) 452-5505, Email: info@templehotels.ca


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