Interstate Hotels & Resorts Receives Notice of Suspension of Trading from NYSE
ARLINGTON, Va. -- Interstate Hotels & Resorts (NYSE: IHR, to be traded over the counter under the ticker symbol IHRI), a leading hotel real estate investor and the nation’s largest independent hotel management company, today announced that it had received notice from the New York Stock Exchange that its common stock, under the ticker symbol IHR, will be suspended from trading prior to the market opening on March 12, 2009.
The company will seek an appeal of the delisting determination as permitted by the NYSE though there are only limited solutions available. The company has not yet been notified as to the timing of the appeal process. Until the appeal is heard, Interstate will remain listed, but will not trade, on the NYSE.
The company’s senior secured credit facility agreement requires that the company be listed on the NYSE. KPMG LLP, the company’s external auditor, has notified the Audit Committee and management that since Interstate’s potential delisting from the NYSE creates a credit facility covenant issue, which, if not resolved, could result in acceleration of the credit facility debt, its auditor report on the consolidated financial statements for the year ended December 31, 2008 will include an explanatory paragraph related to the uncertainty of the company’s ability to continue as a going concern. The company’s credit facility also includes a covenant requiring an audit opinion without exception.
The company is in active discussions with its credit facility lenders to receive a waiver through June 30, 2009, related to the covenant requiring listing on the NYSE as well as the covenant dealing with audit opinions. While there can be no assurances that the company can obtain the waiver, a waiver of these covenants only requires a 51 percent vote by the credit facility lenders.
Thomas F. Hewitt, the company’s chief executive officer, stated that, “Interstate is working quickly to resolve these technical defaults by the end of March so that it can focus its attention on an extension of the credit facility, which the company is working to obtain prior to June 30, 2009.”
Bruce A. Riggins, chief financial officer of the company, noted that, “These technical issues relating to our credit facility do not impact the individual mortgage notes on our three wholly owned hotels.”
As previously announced, the company will distribute a press release and hold a conference call to discuss its fourth-quarter and full-year results for the year ended December 31, 2008 tomorrow, March 12th, at 10 a.m. Eastern Time. The call will be hosted by Chief Executive Officer Thomas F. Hewitt and Chief Financial Officer Bruce Riggins. Stockholders and other interested parties may listen to a simultaneous webcast of the conference call on the Internet by logging onto Interstate’s Web site, , or .
As notification from the NYSE was received only very recently, the company is continuing to evaluate the disclosures to be included in management’s discussion and analysis and the consolidated financial statements and related notes thereto to be included in its Annual Report on Form 10-K. The company intends to file for a 15-day extension to allow it to file its Annual Report on Form 10-K with the Securities and Exchange Commission not later than March 31, 2009.
About Interstate Hotels & Resorts
Interstate Hotels & Resorts has ownership interests in 57 hotels and resorts, including seven wholly owned assets. Together with these properties, the company and its affiliates manage a total of 225 hospitality properties with more than 46,000 rooms in 37 states, the District of Columbia, Russia, Mexico, Belgium, Canada and Ireland. Interstate Hotels & Resorts also has contracts to manage 16 to be built hospitality properties with approximately 4,000 rooms. For more information about Interstate Hotels & Resorts, visit the company’s Web site: .
This press release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, about Interstate Hotels & Resorts, including those statements regarding future operating results and the timing and composition of revenues, among others, and statements containing words such as “expects,” “believes” or “will,” which indicate that those statements are forward-looking. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the volatility of the national economy, economic conditions generally and the hotel and real estate markets specifically, the war in Iraq, international and geopolitical difficulties or health concerns, governmental actions, legislative and regulatory changes, availability of debt and equity capital, interest rates, competition, weather conditions or natural disasters, supply and demand for lodging facilities in our current and proposed market areas, and the company’s ability to manage integration and growth. Additional risks are discussed in Interstate Hotels & Resorts’ filings with the Securities and Exchange Commission, including Interstate Hotels & Resorts’ annual report on Form 10-K for the year ended December 31, 2007.
Chief Financial Officer
Phone: (703) 387-3344