FelCor Lodging to use asset sale proceeds to pay down line of credit

By Lisa Kerner

Charlotte, N.C., July 26 – FelCor Lodging Trust Inc.’s “focus for the remainder of the year, outside of operations, remains asset sales and redevelopment projects,” president and chief executive officer Richard Smith said during the company’s second-quarter earnings call on Tuesday.

The company has agreed to sell two of its properties for a total of $108 million. The $76 million sale of the Renaissance Esmeralda Indian Wells Resort is expected to close on Aug. 1, and the $32 million sale of Holiday Inn, Nashville Airport, is scheduled to close on Sept. 1.

Proceeds will be used to pay down the company’s line of credit, Smith said.

“While we are pleased with this progress, we continue to work very hard on New York hotels that are currently on the market,” said Smith.

Chief financial officer Michael Hughes said that FelCor’s balance sheet is in “great shape, with long-date debt maturities and low fixed interest rates.”

“These sale proceeds give us substantial, incremental investment capacity and flexibility to operate our business and pursue opportunities while generating long-term value for shareholders,” Hughes said on the call.

During the quarter, FelCor repurchased 1.2 million shares at an average price of $6.83 per share.

Hughes said FelCor plans to continue repurchasing its common stock while it trades at a significant discount to its net asset value.

As of June 30, FelCor had $1.5 billion of gross consolidated debt with a 5.2% weighted average interest rate and a seven-year weighted average maturity.

The company had $58.2 million of cash and cash equivalents on hand and $23.7 million of restricted cash at quarter’s end, according to the earnings news release.

FelCor is an Irving, Texas, real estate investment trust that owns a portfolio of primarily upper-upscale and luxury hotels in major and resort markets in the United States.

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