Lakeview Hotel seeks to extend series C, D debentures by three years

By Wendy Van Sickle

Columbus, Ohio, June 26 – Lakeview Hotel Investment Corp. intends to amend the terms of its outstanding redeemable subordinated debentures, series C and D, according to a news release.

There is C$18,326,000 principal amount of series C debentures outstanding and C$10.18 million of series D debentures outstanding.

Holders of each series of debentures are being asked to vote on whether to accept the proposed amendments during meetings to be held on July 25.

The company has been in the process of refinancing some debt and amending some covenants and does not have the available cash to repay either series of debentures at maturity or to make the interest payments at maturity.

“The corporation’s ability to realize its current business strategy and to establish adequate working capital is contingent on, among other things, a successful resolution of the upcoming maturing of such debentures,” the release states.

For each series, holders will be asked to approve pushing back the maturity date to Aug. 31 2022 from Aug. 22, 2019.

Holders will also be asked to approve amending restrictive covenants allowing Lakeview to pay fees to Lakeview Management Inc. incurred in the normal course of business using funds generated through the corporation’s operations provided that the fees will not be paid out of proceeds received from the sale or refinance of any of the corporation’s assets, unless all amounts owed under the debentures have been paid.

Two restrictive covenants would also be added, the first requiring that the corporation refinance its outstanding indebtedness owing to the current holder of senior security by Dec. 31, 2019.

The second would require Lakeview to make commercially reasonable best efforts to pay all amounts owed under the debentures as soon as possible, which may include raising additional funds in the public market, refinancing the debentures with a new lender, and/or selling some or all of its assets.

The amendments would be effective on or about July 26.

If Lakeview receives the written consent of holders at least 66 2/3% of a series of debentures prior to the July meeting, the meeting for that series will be canceled.

Wellington-Altus Private Wealth is the soliciting agent.

Lakeview Hotel Investment is based in Winnipeg, Man., and receives income from ownership, management and licensing of hotel properties.

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