Holloway secures holder approval to take over Royal Host convertibles

By Susanna Moon

Chicago, July 29 – Holloway Lodging Corp. said bondholders approved amendments to three series of notes issued by Royal Host Inc. in connection with its acquisition of the company.

The bondholder meetings were held on July 29.

As previously announced, the companies sought approval to amend the $23.6 million outstanding series B 6.25% convertible unsecured debentures due Oct. 31, 2020, its $40,661,000 outstanding series C 7.5% convertible unsecured debentures due Sept. 30, 2018 and its $29,052,000 outstanding series D 6.25% convertible unsecured debentures due June 30, 2019.

Under the amendments, Holloway will assume liabilities of the debentures, which were previously liabilities of Royal Host.

The convertibles will begin trading on the Toronto Stock Exchange under the new symbols “HLC.DB.B,” “HLC.DB.C” and “HLC.DB.D” during the week of Aug. 4.

The proposed amendments required votes from holders of at least two-thirds of the principal amount of the debentures represented at the meeting.

Holloway completed its acquisition of Royal Host on July 1 for $16.4 million in cash and 1,637,967 of issued Holloway common shares.

The meeting was announced on July 2.

More on amendments

The company also sought to amend the common share interest payment feature to allow the issuance of Holloway shares directly to holders rather than the current method of issuing shares to a third party as a means of funding the interest payments.

The amendment also combined the series B debentures and series D debentures into a single series of debentures with all of the terms that are currently in effect other than the interest payment dates, which would be made consistent with those of the series B debentures, and the maturity date of Feb. 28, 2020, which was the midpoint of the maturity dates of the two series of debentures.

The proposed combination was expected to reduce the cost of maintaining multiple debenture listings and increase the liquidity of each series of debentures, according to a previous press release.

Several additional amendments also were proposed for approval, which are intended to provide Holloway with additional flexibility to carry out its business plan and maximize the value of the enterprise for all stakeholders, the company previously said.

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 is based in Halifax, N.S.

Royal Host owns and operates hotels. It is also based in Halifax, N.S.

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