DALLAS - April 28, 2003 -- Summerfield HPT Lease
Company, L.P., a subsidiary of Wyndham International, Inc. (AMEX:WBR),
announced today the lease termination of 15 Summerfield Suites(R) by Wyndham
properties by Hospitality
| Properties Trust (HPT). The termination
of the lease, which will not affect the Summerfield Suites name currently
branding the 15 properties, resulted from a strategic business decision
on the part of the subsidiary due to the extraordinarily high cost of the
lease structured at the peak of the hotel market. Negotiations between
the two entities regarding a mutually beneficial franchise agreement are
currently taking place.
In addition, negotiations with HPT are still pending on a second deficit-operating
lease with GHALP Partnership, L.P., a Wyndham subsidiary, which includes
12 Wyndham Hotel(R) and Wyndham Garden Hotel(R) properties, located primarily
in secondary and tertiary markets. The GHALP lease agreement has not been
terminated at this time and is currently under negotiation.
|
Wyndham Defaults On Rents
Due
Hospitality Properties Trust
Newton, MA (April 2, 2003): Wyndham International, Inc.
(AMEX: WBR) failed to pay the rent due on April 1, 2003 to Hospitality
Properties Trust (HPT).
HPT owns 27 hotels that are leased to Wyndham under two
combination leases: One lease for 15 Summerfield by Wyndham hotels requires
minimum rent of $2,083,333/month. A second lease for 12 Wyndham hotels
requires minimum rent of $1,527,083/month.
HPT was holding security deposits for both leases totaling
$33.3 million. The notice of default which HPT forwarded to Wyndham earlier
today announced that HPT will retain these deposits against the damages
it may incur under the leases for lost rent or otherwise.
Each of the two leases from HPT is to a so called �bankruptcy
remote� subsidiary of Wyndham. The franchise and management contracts for
all 27 of these hotels are subordinated to Wyndham�s lease obligations
to HPT. Accordingly, HPT has the right to rebrand these hotels.
HPT stated that it is unclear at this time whether Wyndham
has decided to withhold the rents due HPT because it is unable to pay or
as a negotiating tactic in order to seek changes in the lease terms. |
|
"Under the terms of these particular sale/leaseback transactions with HPT,
the properties could not deliver positive EBITDA and required a greater
rent payment than cash generated. Both lessee subsidiaries could not continue
to operate under the existing terms," stated Fred J. Kleisner, a director
of the two subsidiaries and chairman and chief executive officer of Wyndham
International, Inc. "We hope to reach a mutually beneficial agreement with
HPT that allows the properties to continue operating under the Summerfield
Suites by Wyndham and Wyndham Hotels & Resorts brand names, while relieving
them of the deficit-operating leases. Lastly, the financial impact
to the Wyndham subsidiaries if both leases are terminated would improve
the subsidiaries' cash flow on an annualized basis by approximately $14.3
million and would result in an $150 million non-cash write-off of the leases'
remaining book value."
Wyndham International, Inc. offers upscale and luxury hotel and resort
accommodations through proprietary lodging brands and a management services
division. Based in Dallas, Wyndham International owns, leases, manages
and franchises hotels and resorts in the United States, Canada, Mexico,
the Caribbean and Europe.
This press release contains certain forward-looking statements within
the meaning of Sections 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, including projections about future
operating results. |
