Temple Hotels aims to extend 7.25% series E convertibles until 2020

By Susanna Moon

Chicago, Aug. 18 – Temple Hotels Inc. said it is looking to amend its 7.25% series E convertible redeemable unsecured subordinated debentures due Sept. 30, 2017 and to extend the notes by three years.

A meeting has been scheduled for Sept. 21. The record date is Aug. 18.

Specifically, Temple is asking for approval to add a call option at par and to lower the conversion price to C$15.00 per share from C$40.08, according to a company notice.

The company’s stock (Toronto: TPH) closed at C$3.68 on Aug 17.

The convertibles would be extended until Sept. 30, 2020.

If the amendments pass, Temple will redeem C$2,258,200 of the convertibles on a pro rata basis at par plus accrued interest on the original maturity date of Sept. 30, 2017.

To pass, holders of at least 66 2/3% of the principal amount of the debentures represented at the meeting must vote in favor of the amendments.

The company’s board of directors unanimously recommends the changes and believe the “amendments provide a number of benefits to Temple and its securityholders, including to the debentureholders,” the release said.

“Over the last several months, Temple has made great strides to strengthen its balance sheet position, and as the economy strengthens in Alberta, we continue to be excited about the opportunity that lies ahead,” Rai Sahi, the company’s chief executive officer, said in the press release.

“By extending the maturity of the debentures, Temple would be provided financial flexibility so that we can continue to focus on key strategic, business and operational targets that will drive the success of the company for all stakeholders. In addition, we believe that the debenture amendments will provide debentureholders with a longer period of time during which to receive, what we believe to be, an attractive yield.”

Temple is a real estate investment company based in Winnipeg, Man.

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