Exhibit 99.1
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| | RE: | | MHI Hospitality Corporation |
| | | | 410 W. Francis Street |
| | | | Williamsburg, Virginia 23185 |
| | | | (757) 229-5648 |
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| | | | TRADED: NASDAQ: MDH |
FOR YOUR INFORMATION:
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AT THE COMPANY: | | AT FINANCIAL RELATIONS BOARD: | | |
Bill Zaiser | | Vicki Baker | | |
Chief Financial Officer | | General Information | | |
(301) 220-5400 | | (703) 796-1798 | | |
FOR IMMEDIATE RELEASE
TUESDAY, DECEMBER 2, 2009
MHI HOSPITALITY CORPORATION ANNOUNCES
COMPLETION OF RIGHTS OFFERING
Williamsburg, VA – December 2, 2009 – MHI Hospitality Corporation (Nasdaq: MDH)announced today that the offering period of its rights offering expired on November 30, 2009. In connection with the rights offering, the Company previously offered non-transferable rights to purchase 4,337,244 shares of its common stock at a purchase price of $1.60 per share to stockholders of record as of October 14, 2009. In accordance with the terms of the rights offering, subscription rights that were not exercised by November 30, 2009 have expired.
As a result of the offering, the Company has issued 2,132,021 new shares of common stock and will receive gross proceeds of approximately $3.4 million. The proceeds from the rights offering, after payment of fees and expenses incurred in connection therewith, will be used for additional working capital, which may be used for reducing or purchasing the Company’s indebtedness, and other general corporate purposes.
“We are pleased with the effective conclusion of our rights offering,” said Andrew Sims, president and CEO of MHI Hospitality Corporation. “The proceeds of this initiative afford us additional liquidity while minimizing the dilutive effect of the existing shareholder base.”
About MHI Hospitality Corporation
MHI Hospitality Corporation is a self-advised lodging REIT focused on the acquisition, redevelopment and management of mid-scale, upscale and upper-upscale full-service hotels in the Mid-Atlantic, Midwest and Southeastern United States. Currently, the Company’s portfolio consists of investments in eleven hotel properties, nine of which are wholly-owned and comprise 2,110 rooms. All of the Company’s wholly-owned properties operate under the Hilton,
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MHI Hospitality Corporation
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InterContinental Hotels Group and Starwood Hotels and Resorts brands. The Company also has a 25 percent interest in the Crowne Plaza Hollywood Beach Resort and a leasehold interest in the common area of Shell Island Resort, a resort condominium property. MHI Hospitality Corporation was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information please visitwww.mhihospitality.com.
Forward-Looking Statements
This news release includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Although the Company believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, these statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond the Company’s control. Therefore, actual outcomes and results may differ materially from what is expressed, forecasted or implied in such forward-looking statements. Factors which could have a material adverse effect on the Company’s future results, performance and achievements, include, but are not limited to: national and local economic and business conditions, including the current economic downturn, that will affect occupancy rates at the Company’s hotels and the demand for hotel products and services; risks associated with the hotel industry, including competition, increases in wages, energy costs and other operating costs; the availability and terms of financing and capital and the general volatility of the securities markets, specifically, the impact of the current credit crisis which has severely constrained the availability of debt financing; risks associated with the level of the Company’s indebtedness and its ability to meet covenants in its debt agreements; management and performance of the Company’s hotels; risks associated with redevelopment and repositioning projects, including delays and cost overruns; supply and demand for hotel rooms in the Company’s current and proposed market areas; the Company’s ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations; and legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts. These risks and uncertainties are described in greater detail under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. The Company undertakes no obligation and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the Company believes its current expectations to be based upon reasonable assumptions, it can give no assurance that our expectations will be attained or that actual results will not differ materially.
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