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Holloway Lodging sells Holiday Inn-Ottawa for C$50M

Holloway Lodging Corp. sold the Holiday Inn-Ottawa property in Ottawa for C$50.0 million to an unnamed buyer, generating proceeds of C$45.6 million after closing costs and the provision of a C$3.0 million second mortgage.

The company acquired the property in 2014 as part of its acquisition of Royal Host Inc.

Holloway also repaid C$14.3 million of its syndicated term loan and reduced its committed syndicated revolving credit facility to C$21.0 million from C$30.0 million.

Additionally, the company issued a redemption notice to holders of its outstanding 7.50% series C convertible unsecured subordinated debentures due Sept. 30, 2021, by which it will redeem all of its outstanding debentures on Jan. 3, 2019. The company will pay C$1,000 plus accrued and unpaid interest of C$19.32 for each C$1,000 principal amount of the debentures.

Holloway intends to launch a substantial issuer bid by which it will offer to buy 1,200,000, or about 7.0%, of its outstanding common shares at C$6.50 apiece, representing a 10.2% premium price over the Dec. 17 closing price of the shares in Toronto.

The offer will close Jan. 22, 2019, unless withdrawn or extended.