Thunderbird Resorts Inc.: Favorable First Steps in Refinancing Peru-Related Debt
29 Diciembre 2011 - 11:42AM
Marketwired Canada
Thunderbird Resorts Inc. ("Thunderbird" or "Group")
(FRANKFURT:4TR)(EURONEXT:TBIRD) is pleased to announce that it has refinanced a
portion of its of Peru-related debt. As previously announced, the Group has more
than halved its total debt from $169 million at year-end 2009 to $78.8 million
as of September 2011, a decrease of $90 million in just 21 months.
Prior to refinancing, as described below, Peru-related total debt was
approximately $43.0 million or 55% of total Group debt. We are restructuring
this largest piece of our global debt to enhance cash flow and fortify our
balance sheet, which are keys to returning the Group to a growth mode.
Peru-related debt sits on the books of the following entities, all 100% owned by
Thunderbird:
-- Thunderbird Hoteles Las Americas ("THLA"), which owns the Group's two
Peru hotels.
-- Fiesta Casino Benavides ("FCB"), which owns the casino in our Fiesta
Hotel.
-- Sun Nippon ("SN") and Interstate Gaming ("IS"), which collectively own 3
slot parlors and 1 casino.
-- International Thunderbird (BVI) Ltd. ("ITBVI"), which used debt to
capitalize THLA and FCB.
Peru-related debt prior to refinancing was structured as follows (as of November
2011):
----------------------------------------------------------------------------
Peru-related Debt Debt Balance Notes
----------------------------------------------------------------------------
THLA senior debt ("Senior $9,600,000 9.75% rate, 6 years remaining
Debt"):
----------------------------------------------------------------------------
Debt that cash flow sweeps on $18,100,000 10% rate, sweep of cash flow
THLA and FCB ("Sweep Debt"): until paid and owns a 14% share
in distributable income ("Profit
Share")
----------------------------------------------------------------------------
Accrued Interest ("Accrued $4,500,000 Accrued interest on Sweep Debt
Interest"):
----------------------------------------------------------------------------
THLA non-sweep & balloon debt $2,600,000 10% to 13.5% rate, 1 to 2 years
("Balloon Debt"): remaining, contains both
interest only and fully
amortizing components
----------------------------------------------------------------------------
Slot machine debt ("Slot $600,000 Rates from 6.5% to 12%, 6 months
Debt"): to 3 years remaining, monthly
amortization
----------------------------------------------------------------------------
SN &IS senior debt ("Parlor $12,100,000 Approximately 12% rate, 6 years
Debt"): remaining, largely monthly
amorization on 3 notes
----------------------------------------------------------------------------
Total: $47,500,000 See note below
----------------------------------------------------------------------------
Note: The $4.5 million in Acrrued Interest is as of December 2011 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.
Peru-related debt is comprised of approximately 18 lenders. For months, the
Group has been negotiating with these lenders and hopes to announce further
Peru-related debt restructurings in the near term. We are pleased to announce
the two restructurings as follows:
1. Restructured Lender Group 1: 8 Sweep Debt holders have jointly agreed to the
following:
a. Receive 481,615 Thunderbird common shares with an effective price of
$3.09 per share to pay $1,489,102 of a combination of Sweep Debt and
Accrued Interest. This price is a premium to recent trading prices.
b. Replace $4,639,678 of Sweep Debt and Accrued Interest for convertible
notes totaling $4,495,866 with Thunderbird as the borrower ("CNs"). The
difference represents $143,812 of discounts negotiated with Sweet Debt
holders. The CNs pay interest only of 8.5% over a 5-year tenure. The CNs
principal balance shall convert automatically to Thunderbird common
stock at an average price of $3.33 as follows:
i. Tranche 1: Any time after 1 January 2013, 33% of the amount owed
shall convert when the 30-day weighted average trading price is no
less than $3.25 and conversion shall be at $2.50.
ii. Tranche 2: Any time 12 months after conversion of Tranche 1, 33% of
the amount owed shall convert when the 30-day weighted average
trading price is no less than $4.25 and conversion shall be at
$3.25.
iii.Tranche 3: Any time 12 months after conversion of Tranche 2, 33% of
the amount owed shall convert when the 30-day weighted average
trading price is no less than $5.25 and conversion shall be at
$4.25.
The Group may require early conversion based on the same pricing formulas
described above. Under this refinancing, Lender Group 1 terminates its portion
of the Profit Share.
2. Restructured Lender Group 2: A single Sweep Debt holder, which is a Latin
American bank, has agreed to refinance $5.0 million of Sweep Debt balance and
approximately $1.2 million of Accrued Interest in a new note with the following
conditions:
a. The borrower is Thunderbird Hoteles Las Americas ("THLA"), the entity
that owns the Group's two hotels in Peru.
b. The interest rate has been reduced to 8.5% from 10%.
c. Lender Group 2 has terminated its portion of the Profit Share.
d. Lender will fund, as additional loan proceeds, its interest for up to 2
years and at the end of year 3, THLA will repay principal and accrued
interest in a single balloon payment.
Lender Group 2 and THLA entered into this agreement to provide a bridge period
under which this bank and THLA are jointly working to restructure the Senior
Debt in ways favorable to THLA. Negotiations are ongoing and the Group hopes to
make further announcements in the near term, although there can be no assurances
that refinancing of the Senior Debt will be successful. Management believes
these two transactions benefit the Group in key ways:
a. Shares issued are priced at a premium to current market prices.
b. Interest rates have been reduced from 10% to 8.5%.
c. Lenders terminate their portion of the Profit Share, which in effect
increases the value of the Group's ownership in Peru.
d. Peru-related debt (and Group debt) has been reduced effective
immediately by approximately $1.6 million after deducting: i) Sweep Debt
and Accrued Interest exchanged for Thunderbird common stock; and ii)
Discounts on Sweep Debt and Accrued Interest.
e. Upon full conversion, if such occurs, Group debt will be reduced by an
additional approximately $4.5 million at shares prices that are a
premium to current market prices.
The Group is actively negotiating with other lenders of Peru-related debt and
hopes to announce further restructurings in the near term. As part of these
negotiations, the Group expects to issue between 150,000 to 250,000 shares as
success-based financial advisory fees to third party advisors. While there can
be no assurances that these negotiations will be successful, Management believes
that successful outcomes may enhance cash flow, fortify our balance sheet and
help position the Group for a return to growth.
Officer Resignation: The Group announces the resignation of Raul Sueiro,
effective 31 December 2011. Management has been fortunate to have Mr. Sueiro as
an officer and/or employee for over 13 years, most recently as country manager
for the Philippines. Mr. Sueiro is leaving Thunderbird for personal reasons and
we wish him all the best.
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.
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