MISSISSAUGA, ON, Oct. 2, 2017 – Temple Hotels Inc. ("Temple" or "the Company") (TSX: TPH) announced today that the Company has completed the sale of the Holiday Inn Express Hotel & Suites in Sherwood Park, a suburb of Edmonton, AB. The disposition was completed for $9.6 million, excluding taxes and transaction costs.
"This divestiture is an important step in the execution of our strategic plan that will drive the long-term success of the Company," said K. Rai Sahi, Chief Executive Officer. "The opportunistic sale of this property enables us to meet our financial obligations while continuing to strategically diversify the Company's portfolio and decrease our reliance on a single geographic market."
The sale comes as Temple moves to mitigate exposure in Alberta, which continues to be impacted by the oil-related economic downturn, as part of the Company's overarching growth strategy. Temple's second quarter results showed positive progress and a strengthened financial position, with the Company posting increases in net income and revenue over previous periods.
The Company used the proceeds of the sale to repay $9.1 million of mortgages payable secured against the property. As reported in an earlier update, Temple has resolved five of the ten covenant violations reported at June 30, 2017. The Company continues to work diligently with its lenders to resolve the remaining mortgage covenant violations, which have primarily been caused by the downturn in the Alberta market. The outstanding breaches are expected to be resolved by debt refinancing, loan modifications agreements and/or a waiver of the covenant requirements.
"We appreciate the support of our lenders as we continue to make progress that will deliver the long-term success of Temple," said Sahi.
