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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported): March 29, 2011 (March 23,
2011)
SUMMIT
HOTEL PROPERTIES, INC.
(Exact
Name of Registrant as Specified in its Charter)
SUMMIT
HOTEL OP, LP
(Exact
Name of Registrant as Specified in its Charter)
2701
South Minnesota Avenue, Suite 6
Sioux
Falls, South Dakota 57105
(Address
of Principal Executive Offices) (Zip Code)
(605)
361-9566
(Registrants’
telephone number, including area code)
Not
applicable
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
Item
1.02. Termination
of a Material Definitive Agreement.
Effective
as of March 23, 2011, the franchise agreements between subsidiaries of
Summit Hotel Properties, Inc. (the “Company”) and Summit Hotel OP, LP
and Choice Hotels International, Inc. (“Choice”) for eleven hotels that
operated under franchise licenses from Choice were terminated.
The
Company is now in active negotiations with other franchisors in
anticipation of changing all eleven hotels to operate under new
franchise brands, and expects to enter into new franchise agreements to
re-flag all eleven of these hotels with new franchisors within the next
several weeks.
The
Company and its subsidiaries will cease using Choice’s trade dress and
proprietary marks at the following hotels within the timeframes
prescribed by the franchise agreements:
The
Company is in negotiations with Choice with respect to any amounts
payable in connection with the terminations.
The
eleven hotels are encumbered by mortgage debt in an aggregate amount of
approximately $58.8 million, and the Company has received or expects to
receive verbal or written waivers or forbearances from declaring or
enforcing defaults from the lenders to the effect that the franchise
terminations will not be deemed a default under the respective loan
agreements.
Item
2.04. Creation of
a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
The
information set forth under Item 1.02 of this Current Report on Form
8-K is hereby incorporated by reference into this Item 2.04.
Item
8.01. Other Events.
On
March 29, 2011, a subsidiary of the Company entered into a purchase and
sale agreement to purchase two hotels from InterContinental Hotels
Group (“IHG”) for an aggregate purchase price of approximately $17.0
million:
On
March 14, 2011, a subsidiary of the Company entered into a purchase and
sale agreement to purchase the 91-room Homewood Suites by Hilton
Jackson-Ridgeland in Ridgeland, Mississippi from an unaffiliated third
party for an aggregate purchase price of approximately $7.3 million, or
approximately $80,220 per key.
The
Company expects to fund the purchase price of all three hotels with
borrowings from the Company’s anticipated credit facility, which the
Company expects to complete in early April 2011. The closings of the
acquisitions are expected to occur in the second half of April 2011.
However, because each acquisition is subject to customary closing
requirements and conditions, the Company can give no assurance that the
transactions will be consummated during that time period or at all.
Forward-Looking
Statements Disclaimer.
This
Current Report on Form 8-K contains statements that are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Act of 1934, as amended, pursuant to the safe harbor provisions of the
Private Securities Reform Act of 1995. These forward-looking statements
relate to, among other things, potential changes in franchisors of the
Company’s hotels, projected outcomes of negotiations between the
Company and third parties, expectations relating to acquisitions and
projected financial and operating results. Forward-looking statements
are based on certain assumptions and can include future expectations,
future plans and strategies, financial and operating projections or
other forward-looking information.
These
forward-looking statements are subject to various risks and
uncertainties, not all of which are known to the Company and many of
which are beyond the Company’s control, which could cause actual
results to differ materially from such statements. These risks and
uncertainties include, but are not limited to, the state of the U.S.
economy, supply and demand in the hotel industry and other factors as
are described in greater detail in the Company’s filings with the
Securities and Exchange Commission, including, without limitation, the
Company’s Prospectus filed pursuant to Rule 424(b)(4) on February 10,
2011. Unless legally required, the Company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
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Contact: Summit Hotel Properties, Inc. 2701 S. Minnesota, Suite 6 Sioux Falls, SD 57105 Phone: 605-361-9566 |