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Be the first with the news that moves the market- Lakeview Hotels (TSXV:LHIC) has admitted it could default on loans facilities and other debt agreements due to COVID-19 shutdowns
- Lakeview may not be able to fulfil their debt obligations, in either principal or interest payments
- Company has announced occupancy at it’s Alberta and British Columbia hotels have hit all time lows
- Lakeview may be forced to close hotels all together during this period
- Lakeview Hotels Investment Corp (TSXV:LHIC) is holding steady at C$0.03 per share with a market cap of $500,000
Lakeview Hotel Investment Corp (TSXV:LHIC) have indicated they may be in danger of defaulting on credit obligations during COVID-19 shutdowns.
Lakeview are especially worried about their ability to obtain additional equity or debt financing, re-negotiate existing debt and make principal or interest payments to its lenders and to holders of Lakeview debt.
The company indicated in a media statement released yesterday afternoon they are in the very real danger of defaulting on loans.
Despite this, Lakeview has announced it is still open for business, even with huge downturns in occupancy rates across hotels.
Lakeview stated their 6 hotels are running on modified programs to ensure continuity of business in some shape or form.
Lakeview are currently operating all hotels without food and beverage offerings, to comply with social distancing and public gathering regulations.
Guestroom bookings and occupancy rates have cratered since COVID-19 hit North America, decimating the tourism market in particular.
The company’s hotels in Alberta and British Columbia have also been hit by the significant drop in the price of oil over March, which has lead to vast reductions in staff numbers and rig shutdowns by energy companies.
Those measures have pinched the hotels even further.
In a bid to keep itself above water, the company has considered some fairly drastic actions. Lakeview Hotels Investment Corp (TSXV:LHIC) have indicated they may be in danger of defaulting on credit obligations during COVID-19 shutdowns. bn
Hotels in Alberta and British Columbia may be closed all together in a bid to preserve cash and strengthen Lakeview’s overall financial position.
In their statement, Lakeview claim they expect negative affects from COVID-19 will continue to assail the company.
“Occupancy rates will continue to decline in the near future as the COVID-19 outbreak continues to impact the Canadian economy, the hotel industry, the willingness of the general public to travel and the oil and natural resources industries needing hotel space for its employees and contractors.”
They expect their overall financial results for the year and the company’s financial health to be severely impacted by the shutdown.
Lakeview Hotel Investment Corp (LHIC) is holding steady trading at $0.03 per share at 2:00 pm EST.
