The Lodge at Kananaskis Limited Partnership

The Mountain Inn at Ribbon Creek Limited Partnership

December 11, 2007 13:48 ET

The Lodge at Kananaskis Limited Partnership & The Mountain Inn at Ribbon Creek Limited Partnership: Acquisition of Executive Resort and Refinancing

KANANASKIS, ALBERTA--(Marketwire - Dec. 11, 2007) - The Lodge at Kananaskis Limited Partnership (the "Lodge LP") and The Mountain Inn at Ribbon Creek Limited Partnership (the "Mountain Inn LP") are pleased to announce the acquisition through a new limited partnership owned by the Lodge LP and the Mountain Inn LP, Kananaskis Hotel No. 3 Limited Partnership (the "No. 3 LP"), of the 91-room hotel at Kananaskis Village, Kananaskis, Alberta known as the Executive Resort at Kananaskis (the "Executive Resort"). The Lodge LP owns and operates the 251-room hotel known as the Delta Lodge at Kananaskis (the "Delta Lodge"). The Mountain Inn LP owns and operates the 70-room Signature Club at the Delta Lodge at Kananaskis (the "Signature Club").

The vendor of the Executive Resort is an arm's length party. The purchase price for the Executive Resort is $12.5 million. To finance the purchase of the Executive Resort and to refinance the existing mortgage loans of the Lodge LP and the Mountain Inn LP, the three partnerships obtained a mortgage loan from an arm's length lender secured by a first charge on the Delta Lodge, the Signature Club and the Executive Resort properties, in the principal amount of $33.75 million, having a term of 85 months, and bearing interest of 7.52% per annum for the first 84 months of the term and interest of 4% above the one month's banker's acceptance rate per annum for the last month of the term. Approximately $19.55 million of the new loan was used to retire the existing mortgage loans, including accrued interest and certain expenses; $12.5 million was used to fund the purchase of the Executive Resort; $1.3 million has been allocated for certain capital expenditures on the Delta Lodge and Signature Club; and the remaining $0.4 million was used for payment of expenses of the refinancing and the purchase of the Executive Resort.

In connection with the acquisition of the Executive Resort, the Lodge LP and the Mountain LP have also amended an existing joint venture agreement with respect to the operation of the Delta Lodge and the Signature Club to include the No. 3 LP and the Executive Resort. Under the amended joint venture agreement, the three hotels will be operated effectively as a single hotel to maximize operating efficiencies and cash flow for the benefit of all three partnerships. Under the amended joint venture agreement, each partnership will receive a certain percentage of the combined cash flow of the joint venture, from which each partnership is responsible for its own debt service obligations and capital expenditures. The sharing ratio is 21% for the No. 3 LP, 57% for the Lodge LP and 22% for the Mountain Inn LP.

For further information, please contact:

John K. Pennington

President of Kananaskis Alpine Resort Inc., General Partner of The Lodge at Kananaskis Limited Partnership President of 350136 Alberta Ltd., General Partner of The Mountain Inn at Ribbon Creek Limited Partnership

Phone: 905-847-6120

Contact Information

  • Kananaskis Alpine Resort Inc.
    John K. Pennington
    President
    (905) 847-6120