Thunderbird Resorts Inc.: Sale of a Non-Strategic Hotel for $13.6 Million; Restructuring of 65%+ of Group Debt; Update on India; January 2012 Revenue Report
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Thunderbird Resorts Inc. /
Thunderbird Resorts Inc.: Sale of a Non-Strategic Hotel for $13.6 Million;
Restructuring of 65%+ of Group Debt; Update on India; January 2012 Revenue
Report
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The issuer is solely responsible for the content of this announcement.
PANAMA, REPUBLIC OF PANAMA--(Marketwire - February 20, 2012) - Thunderbird
Resorts Inc. ("Thunderbird" or "Group") (EURONEXT: TBIRD)(FRANKFURT: 4TR)
reports the following:
PRELIMINARY AGREEMENT TO SELL NON-STRATEGIC HOTEL
Non-reimbursable deposit of $1.0 million received toward sale of Thunderbird
Resorts - El Pueblo Hotel in Peru El Pueblo is non-strategic because it does not
fit within the Group's business model. Agreed to sale price is sufficient to
repay all Peru Senior Debt.
The Group has received a non-refundable deposit of $1.0 million toward the
purchase of the Thunderbird Resorts - El Pueblo Hotel & Convention Center
located near Lima, Peru ("El Pueblo"). The sale price is for approximately $13.6
million, which includes the real estate, FF&E and other considerations, and is
more than sufficient to repay all existing Peru Senior Debt (see table below).
El Pueblo generated approximately $602 thousand in EBITDA in 2011 or less than
3% of Group consolidated adjusted EBITDA based on preliminary, unaudited
results. Management believes Group-wide debt from continuing and discontinued
operations will fall to less than 3.5X adjusted EBITDA post transaction (based
on preliminary, unaudited 2011 results). The parties have agreed to close final
documents and complete funding by Q2 2012. There can be no assurances that the
purchaser will conclude the transaction.
The Group's mission is to "create extraordinary experiences for our guests"
through our standalone gaming facilities, our integrated resorts anchored by
casinos and through standalone hotels operated by Thunderbird, but owned by
third parties. El Pueblo will not be appropriate for a casino in the near
future, but is a beautiful property that fits well into the Group's parameters
for management contracts. Under preliminary agreements with the buyer, the Group
will manage El Pueblo and, in general, the Group will continue to build out this
segment of its business as interesting opportunities are developed.
FINAL AND PRELIMINARY AGREEMENTS TO RESTRUCTURE
$44 MILLION OF PERU-RELATED AND $10 MILLION OF GROUP-WIDE DEBT
Management believes final and preliminary agreements to restructure 65%+ of
Group debt will enhance cash flow by $5M+ per annum. Exclusive of any new
project finance, Management believes total Group debt from continuing and
discontinued operations will be further reduced to less than 3.2X adjusted
EBITDA in the second half of 2012.
As previously stated, the Group has been aggressively deleveraging to improve
cash flow and to enhance our balance sheet as we position ourselves to once
again invest in growth. Through 31 December 2011, we reduced total debt from
continuing and discontinued operations to approximately $78.5 million as
compared to $121 million at year-end 2010 and $169 million at year-end of 2009.
Management is pleased to announce that a series of final and preliminary
agreements with over 20 lenders have been executed to restructure approximately
$44.0 million of Peru-related debt and approximately $10.3 million of Group-wide
debt. The effect of the restructuring (including those restructurings that are
at the preliminary stage or advanced negotiation stage) is as follows:
Principal balance to be materially reduced: Excluding any new project debt, the
Group believes that debt from continuing and discontinued operations will
decrease to less than 3.2X adjusted EBITDA in the second half of 2012 based on
unaudited, preliminary 2011 year-end results.
Cash flow to be materially improved: The Group believes that cash flow should
improve by over $5 million on an annualized basis starting in the second half of
2012. Any cash flow improvement is expected to come from: (i) a reduced
principal balance; (ii) a reduced weighted average cost of capital on the total
restructured amounts; and (iii) from longer amortization terms.
Peru-related debt prior to refinancing was structured as described below. We are
showing summary unaudited November 2011 debt so as to compare to a related press
release made in December 2011.
+-------------------------------+------------+---------------------------------+
|Peru-related Debt |Debt Balance| Notes|
+-------------------------------+------------+---------------------------------+
|THLA senior debt ("Senior | | |
|Debt"): | $9,600,000| 9.75% rate, 6 years remaining|
+-------------------------------+------------+---------------------------------+
|Debt that cash flow sweeps on | | 10% rate, sweep of cash flow|
|THLA and FCB ("Sweep Debt"): | | until paid and held a collective|
| | | 14% share in available cash flow|
| | $18,100,000| ("Profit Share")|
+-------------------------------+------------+---------------------------------+
|Accrued Interest ("Accrued | | |
|Interest"): | $4,500,000| Accrued interest on Sweep Debt|
+-------------------------------+------------+---------------------------------+
|THLA non-sweep & balloon debt | | 10% to 13.5% rate, 1 to 2 years|
|("Balloon Debt"): | |remaining, contains both interest|
| | | only and fully amortizing|
| | $2,600,000| components|
+-------------------------------+------------+---------------------------------+
|Slot machine debt ("Slot | | Rates from 6.5% to 12%, 6 months|
|Debt"): | | to 3 years remaining, monthly|
| | $600,000| amortization|
+-------------------------------+------------+---------------------------------+
|SN & IS senior debt ("Parlor | | Approximately 12% rate, 6 years|
|Debt"): | | remaining, largely monthly|
| | $12,100,000| amortization on 3 notes|
+-------------------------------+------------+---------------------------------+
|Total: | $47,500,000| See note below|
+-------------------------------+------------+---------------------------------+
Note: The $4.5 million in Accrued Interest and is not reflected as debt on Group
books, but rather is booked under Other Financial Liabilities. Net of this
amount, total Peru-related debt is $43.0 million. "THLA" is the Thunderbird
entity that owns our Peru hotels. "FCB" is the Thunderbird entity that owns our
Peru Fiesta Casino. "SN & IS" are the Thunderbird Peru entities that own our
Peru slot parlors.
Below is a summary of each Peru-related debt restructuring:
Restructuring of "Parlor Debt" (Final Agreements): The Group announces that it
has restructured certain parent company debt owed to Capital International
Assets Corp. ("CIA Corp") related to funding of our Peru gaming operations. This
debt was restructured as follows:
Parlor Debt Paydown: $718 thousand of principal balance was paid with $476
thousand in cash and the balance was paid with 78,317 common shares of
Thunderbird. An additional 96,683 of Thunderbird common shares were used to pay
a refinance fee of approximately $300,000, equal to approximately 2.5% of the
Parlor Debt (see table above) principal amount. The implied price under both
transactions was $3.09 per common share.
Parlor Debt Restructuring: All remaining Parlor Debt principal balance was
amended such that: (i) the interest rate was lowered from 12.1% to 11%; and (ii)
payments were reduced from approximately $270,000 to $160,000 per month, with
the security maturing in January 2017; enhancing cash flow by approximately $1.3
million on an annualized basis effective immediately.
Restructuring of Peru Senior Debt (Preliminary Agreements): The Group announces
that it has entered into agreements to refinance the Peru Senior Debt as
follows:
Repayment of Senior Debt: As agreed to in the letter of intent with the El
Pueblo buyer, upon completion of the sale, the Group's will repay all Peru
Senior Debt (as identified in the table above) plus closing and transfer costs
of the current Peru senior lender.
Possible New Senior Lender: We are in advanced negotiations with two banks to
lend approximately $8-$10 million secured by a first position in the Fiesta
Hotel & Casino ("New Senior Loan"). The new debt would be used to replace Sweep
Debt (see table above) with materially more favorable terms. There can be no
assurance that the New Senior Loan will be concluded successfully.
Restructuring of Peru Sweep Debt (Final & Preliminary Agreements): The Group
announces that it has entered into agreements to refinance the Peru Sweep Debt
as follows:
Restructuring of Sweep Debt: $18.1 million in Sweep Debt and $4.7 million of
Accrued Interest (approximately $22.8 million in total) has been or will be
restructured as follows:
a) Final agreements have been executed to restructure approximately $6.1 million
of Sweep Debt and Accrued Interest with 8 lenders as per our press release dated
29 December 2011.
b) Final agreements have been executed to restructure $6.7 million of Sweep Debt
and Accrued Interest with a Latin American bank as per our press release dated
29 December 2011.
c) We are in advanced negotiations with virtually all remaining Sweep Debt
lenders under which: (i) Approximately 40% of remaining Sweep Debt would reduce
their interest below the current 10% rate, partially discount their Accrued
Interest and, in exchange, receive a secured position subordinated to the New
Senior Loan ("Subordinated Lenders"); and (ii) The remainder would reduce their
interest below the current 10% rate, partially discount their Accrued Interest,
and their principal loan balance may potentially convert to Thunderbird common
stock under the same pricing structure and schedule as disclosed in our press
release dated 29 December 2011. There can be no assurances that the remaining
Sweep Debt will be successfully restructured.
The Group believes Senior Debt and Sweep Debt restructurings (as described
above) should further enhance cash flow by approximately $2.0 million annually
starting in the second half of 2012.
Restructuring of Various Group Debts (Final Agreements): The Group has
previously announced that it intends to build stronger cash reserves and to
improve cash flows. The Group is pleased to announce that it has entered into
final agreements with multiple debt lenders representing $10.3 million in
principal balance as of 31 December 2011. Under the terms of these agreements
the Group will defer payments to the lenders for 5 months, with the deferred
interest due as a balloon payment upon the existing maturity dates. Between
these lenders and normal scheduled debt pay down, the Group expects to further
improve cash flow by approximately $3.0 million during 2012.
UPDATE ON INDIA
The Group's India affiliate Daman Hospitality Private Limited ("DHPL"), in which
the Group is a minority shareholder, previously announced an expected soft
opening of some rooms and amenities by year-end 2011 and the balance completed
by Q1-2012. The project known as "Thunderbird Resorts - Daman" has completed: a)
approximately 100 hotel rooms (of a total of 176 rooms); b) three bars &
restaurants; c) pool and outdoor plaza areas; and d) approximately 50% of indoor
meeting areas. To date, DHPL awaits the granting of a hotel occupancy permit
which is a necessary step to opening. The Group expects to have further
announcements on India as and when material developments occur.
JANUARY 2012 REVENUE REPORT
Consolidated Revenue: 1.3% decrease January year-to-year but trending up since
Sept 2011
Philippines Revenue: Revenue flat in January year-to-year and trending flat
last two quarters
Peru Revenue: Revenue up in January year-to-year and trending up since
Sept 2011
Costa Rica Revenue: Revenue flat in January year-to-year and trending up since
Sept 2011
Nicaragua Revenue: Revenue down in January year-to-year and flat last two
quarters
Revenue by Segment: Non-gaming revenue now approximately 20% of global revenue
For a more detailed analysis of January 2012 revenue, please go to the Company's
web page at: www.thunderbirdresorts.com and click on "January 2012 Revenue
Report - Analysis", which will be located on the home page under "News and Press
Releases".
+-----------------------------------+-------+-------+---------------------+
|Group-wide sales results by country|January|January|Year-over-year |
|(unaudited, in thousands) |2012 |2011 |Increase / (Decrease)|
+-----------------------------------+-------+-------+---------------------+
|Costa Rica |1,667 |1,806 |-7.7% |
| | | | |
|Nicaragua |925 |939 |-1.5% |
| | | | |
|Philippines |3,980 |4,080 |-2.5% |
| | | | |
|Peru |3,024 |2,893 |4.5% |
+-----------------------------------+-------+-------+---------------------+
|Total Consolidated Revenues |9,596 |9,718 |-1.3% |
+-----------------------------------+-------+-------+---------------------+
ABOUT THE COMPANY
We are an international provider of branded casino and hospitality services,
focused on markets in Asia and Latin America. Our mission is to "create
extraordinary experiences for our guests". Additional information about the
Group is available at www.thunderbirdresorts.com.
Cautionary Notice: This release contains certain forward-looking statements
within the meaning of the securities laws and regulations of various
international, federal, and state jurisdictions. All statements, other than
statements of historical fact, included herein, including without limitation,
statements regarding potential revenue and future plans and objectives of the
Group are forward-looking statements that involve risk and uncertainties. There
can be no assurances that such statements will prove to be accurate and actual
results could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from the
Group's forward-looking statements include competitive pressures, unfavorable
changes in regulatory structures, and general risks associated with business,
all of which are disclosed under the heading "Risk Factors" and elsewhere in the
Group's documents filed from time-to-time with the NYSE Euronext Amsterdam and
other regulatory authorities.
Contacts:
Thunderbird Resorts Inc.
Kevin McDonald
Investor Relations
(858) 668-2503
kevin.mcdonald(at)thunderbirdresorts.com
Thunderbird Resorts Inc.
Peter LeSar
Chief Financial Officer
(507) 223-1234
plesar(at)thunderbirdresorts.com
www.thunderbirdresorts.com
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Thunderbird Resorts Inc. via Thomson Reuters ONE
[HUG#1587296]
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Datum: 20.02.2012 - 07:48 Uhr
Sprache: Deutsch
News-ID 116274
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