Hey there, time traveller!
This article was published 13/11/2021 (403 days ago), so information in it may no longer be current.
Lakeview Hotel Investment Corp., the publicly traded vehicle of the Winnipeg real estate company owned by the Levit family, has been sold to a Burnaby, B.C., hotel management firm.
At the time of the transaction this week LHIC owned five hotels: Lakeview Inn and Suites, Okotoks; Lakeview Inn and Suites, Fort Saskatchewan; Lakeview Inn and Suites, Fort St. John; Lakeview Inn and Suites, Chetwynd; and Lakeview Inn & Suites, Edson Airport West.
The hotels had a total room count of 406.
The company had loaded up on small hotels in Alberta, Saskatchewan and B.C. looking to take advantage of the oil boom. About 10 years ago it owned 18 hotels with a total of 1,352 rooms and had licensing agreements with five other hotels containing 352 rooms.
But the COVID-19 pandemic and the prior decline in growth in investment in the oilsands left the company defaulted on mortgages and its syndicated credit facility.
The deal to sell the company to newly created subsidiaries of First Canadian Management Corp. is for two cents per share for a total cash consideration of $391,156.
The purchaser is also acquiring outstanding debentures debt for just over $2 million and the purchaser has agreed to pay to LHIC approximately $15 million to satisfy all amounts owing by LHIC to its lending syndicate led by ATB Financial.
Those hotels paid licence fees to, but were not owned by, LHIC.
The company has been trying to refinance and/or sell assets for several months and have been given extensions from lenders for some time.
In its quarterly report to investors in June the company stated that it had a principal balance owing of $497,483 and $14,001,260 on its revolving term operating and syndicated term facilities, respectively.
Just prior to the pandemic it sold Lakeview Inn & Suites in Whitecourt and Drayton Valley, Alta., for a total of $1.8 million and the company was required by its lenders to list properties for sale located in Fort Saskatchewan and Edson, Alta., and Fort St. John, B.C., in order to reduce the outstanding balances payable on the credit facilities.
The company has not filed a revenue statement since June when it reported a loss of $1.7 million for the first quarter of this year. Room occupancy for the quarter was 34.87 per cent.
It is not clear how this affects the ownership of other Lakeview hotels that were not owned by LHIC including The Grand Hotel at the Winnipeg Richardson Airport and Lakeview hotels in Gimli and Hecla in Manitoba.
The transaction, which will be completed by way of a plan of arrangement, is expected close in late December 2021, subject to closing conditions.
Officials from LHIC and First Canadian Management Corp. were not available for comment.
Martin Cash
Reporter
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
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