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Summary of Transaction Highlights:
Lodgian Senior Management Comments �As we have previously outlined, our number one priority for 1999 was to put in place a capital structure that allows the company to execute its business strategy without the pressure of near-term debt maturities. We accomplished this. The fact that Lodgian completed a $565 million recapitalization in the current tight market for capital demonstrates the confidence the investment community has in the future of this company and our ability to execute our business plan,� remarked Robert S. Cole, Lodgian�s President and Chief Executive Officer. Cole outlined the objectives accomplished by establishing Lodgian�s new capital structure:
Commented Posner: �Of the company�s 132 owned assets, we have greatly reduced the number of hotels that are subject to financing that is restrictive in terms of asset sales and prepayment. Near-term debt maturities have been extended and a capital structure has been put in place that provides financial flexibility, enhances liquidity and provides the opportunity to reduce leverage. Additionally, less than half of Lodgian�s total indebtedness is now floating rate debt.� Added Cole: �In addition to improving our capital structure, our whole management team remains focused on achieving operational excellence, capturing internal growth, increasing market share and improving profit margins. Integral to achieving these goals is the final phase of our highly successful $200 million renovation and repositioning program.� �With the completion of these capital improvements, we will have either renovated or newly developed more than 80 percent of the company�s portfolio within the past five years. I would also observe that RevPAR and margin improvement trends compared to 1998 remain favorable. I believe that the company is poised to generate significant increases in earnings over the next few years from internal growth alone. Consequently, Lodgian should emerge as one of the dominant forces in lodging and a recognized leader in the entire hospitality industry. This new capital structure is a major step toward attaining our long-term vision of becoming the premier owner/operator of hotels in the country.� About Lodgian Lodgian, Inc. owns or manages a portfolio of 135 hotels with more than 25,000 rooms in 35 states and Canada. The hotels are primarily full service, providing food and beverage service as well as lodging and meeting facilities. Substantially all of Lodgian�s hotels are affiliated with nationally recognized hospitality brands such as Holiday Inn, Crowne Plaza, Marriott, Sheraton, Hilton, Doubletree and Westin. Lodgian�s common shares are listed on the New York Stock Exchange under the symbol �LOD.� Lodgian is a component of both the Russell 2000® Index, representing small cap stocks, and the Russell 3000® Index, representing the broader market. Note: Statements in this press release which are not strictly historical are �forward-looking� statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, which may cause the company�s actual results in the future to differ materially from expected results. These risks include, among others, competition within the lodging and contract service industries; the relationship between supply and demand for hotel rooms; the effects of economic conditions; issues associated with the ongoing integration of the former Servico, Inc. and Impac Hotel Group, the acquisition and renovation of existing hotels and the development of new hotels; operating risks; the cyclical nature of the lodging industry; risks associated with the dependence on franchisers of the company�s lodging properties; and the availability of capital to finance planned growth, as described in the company�s filings with the Securities and Exchange Commission. |
Lodgian, Inc. http://www.lodgian.com |
Also See: | Lodgian Sells Interest in European Hotels to Krasnapolsky Hotels & Restaurants N.V. / June 1999 |