BURLINGTON, ON, June 6, 2023
/CNW/ - SIR Royalty Income Fund (TSX: SRV.UN) (the "Fund")
today announced that SIR Corp. ("SIR" or the "Company"), the
operating entity from which the Fund's equity income is ultimately
derived, has completed a Tenth amending agreement (the "Tenth
Amending Agreement") to its credit agreement with its senior lender
(the "Lender"). The Tenth Amending Agreement, among other things,
extends the maturity date of the credit agreement from July 6, 2023 to July 6,
2026, with the exception of the guaranteed facility from
Export Development Canada (the "EDC-Guaranteed Facility"), which
has a new maturity date of July 6,
2024. Interest rates have been reduced under the Tenth
Amending Agreement, with the exception of the interest rate on the
guaranteed facility with Business Development Bank of Canada (the "BDC-Guaranteed Facility"), which
remains fixed at 4% per annum. Bankers' acceptance fees have also
been reduced on Credit Facility 1 and Credit Facility 2. Credit
Facility 2 reverts to a revolving term facility.
The Tenth Amending Agreement provides certainty and availability
of funding over the next three years, enabling SIR to continue to
invest in restaurant renovations and new restaurants to drive
growth in revenue and same store sales(1).
The following is a current summary of SIR's credit facilities
under the Tenth Amending Agreement:
- Credit Facility 1 – a $20.0
million revolving facility, bearing interest at the prime
rate plus 2.75% or the bankers' acceptance rate plus 3.75%, with
principal to be repaid on July 6,
2026. As of the current date, SIR has drawn $NIL on Facility
1.
- Credit Facility 2 – a $10.7
million revolving facility, bearing interest at the prime
rate plus 2.75% or the bankers' acceptance rate plus 3.75%. Each
advance under Credit Facility 2 is repayable in equal quarterly
instalments based on a seven-year amortization. Facility 2 is
currently fully drawn.
- The $6.25 million EDC-Guaranteed
Facility, bearing interest at the prime rate plus 3%. The
EDC-Guaranteed Facility is a 364-day revolving term facility that
can be extended annually at the Lender's sole discretion. The
EDC-Guaranteed Facility is currently fully drawn.
- The $6.25 million BDC-Guaranteed
Facility, bearing interest at a fixed rate of 4%. The
BDC-Guaranteed Facility is a fully drawn, non-revolving term credit
facility. As of the current date, SIR has drawn $5.44 million on the BDC-Guaranteed
Facility.
As part of the Tenth Amending Agreement, the Fund and the SIR
Royalty Limited Partnership (the "Partnership") also entered into
an acknowledgement agreement (the "Acknowledgement Agreement") with
the Lender acknowledging, among other things:
- receipt of a copy of the Tenth Amending Agreement, and
- that none of either: entering the agreement, borrowing under
the agreement, or performing any of the obligations under the
agreement shall breach any of the terms or constitute an event of
default under any of the Fund's or the Partnership's existing
agreements with the Company.
The Tenth Amending Agreement and the Acknowledgement Agreement
can be accessed via the Fund's profile on the SEDAR website at
www.sedar.com.
About SIR Corp.
SIR Corp. ("SIR") is a privately held
Canadian corporation that owns a portfolio of 53 restaurants in
Canada. SIR's Concept brands
include: Jack Astor's Bar and
Grill®, with 37 locations; and Scaddabush Italian Kitchen &
Bar® with 10 locations. SIR also operates one-of-a-kind "Signature"
brands including Reds® Wine Tavern, Reds® Square One, Reds® Kitchen
+ Wine Bar Fallsview and The Loose Moose®. All trademarks
related to the Concept and Signature brands noted above are used by
SIR under a License and Royalty Agreement with SIR Royalty Limited
Partnership. SIR also owns one Duke's Refresher® & Bar location
in downtown Toronto, and one
seasonal Signature restaurant, Abbey's Bakehouse®, which are
currently not in consideration to be part of the Royalty Pool. For
more information on SIR Corp. or the SIR Royalty Income Fund,
please visit www.sircorp.com.
About SIR Royalty Income Fund
The Fund is a trust
governed by the laws of the province of Ontario that receives distribution income from
its investment in the SIR Royalty Limited Partnership and interest
income from the SIR Loan. The Fund intends to pay distributions to
unitholders on a monthly basis.
Non-IFRS Financial Measure
(1) Same store sales ("SSS") is a non-GAAP financial
measure and does not have a standardized meaning prescribed by
International Financial Reporting Standards ("IFRS"). However, the
Fund believes that SSS is a useful measure and provides investors
with an indication of the change in year-over-year sales. The
Fund's method of calculating SSS may differ from those of other
issuers and, accordingly, SSS may not be comparable to measures
used by other issuers. SSS includes revenue from all SIR
Restaurants included in Pooled Revenue except for those locations
that were not open for the entire comparable periods in 2023 and
2022.
Caution concerning forward-looking
statements
Certain statements contained in this report,
or incorporated herein by reference, including the information set
forth as to the future financial or operating performance of the
Fund or SIR, that are not current or historical factual statements
may constitute forward-looking information within the meaning of
applicable securities laws ("forward-looking statements").
Statements concerning the objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and the
business, operations, financial performance and condition of the
Fund, the SIR Holdings Trust (the "Trust"), the Partnership, SIR,
the SIR Restaurants or industry results, are forward-looking
statements. The words "may", "will", "should", "would", 'could",
"expect", "believe", "plan", "anticipate", "intend", "estimate" and
other similar terminology and the negative of such expressions are
intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Fund, the Trust, the
Partnership, SIR, the SIR Restaurants or industry results, to
differ materially from the anticipated results, performance,
achievements or developments expressed or implied by such
forward-looking statements. These statements reflect Management's
current expectations, estimates and projections regarding future
events and operating performance and speak only as of the date of
this document. Readers should not place undue importance on
forward-looking statements and should not rely upon this
information as of any other date. Risks related to forward-looking
statements include, among other things, challenges presented by a
number of factors, including: the impact of the COVID-19 pandemic;
market conditions at the time of this filing; competition; changes
in demographic trends; weather; changing consumer preferences and
discretionary spending patterns; changes in consumer confidence;
changes in national and local business and economic conditions;
pandemics or other material outbreaks of disease or safety issues
affecting humans or animals or food products; the ability to
maintain staffing levels; the impact of inflation, including on
input prices and wages; the impact of the crisis in the
Ukraine; changes in tariffs and
international trade; changes in foreign exchange and interest
rates; changes in availability of credit; legal proceedings and
challenges to intellectual property rights; dependence of the Fund
on the financial condition of SIR; legislation and governmental
regulation, including the cost and/or availability of labour as it
relates to changes in minimum wage rates or other changes to labour
legislation and forced closures of or other limits placed on
restaurants and bars; laws affecting the sale and use of alcohol
(including availability and enforcement); changes in cannabis laws;
changes in environmental laws; privacy matters; accounting policies
and practices; changes in tax laws; and the results of operations
and financial condition of SIR. The foregoing list of factors is
not exhaustive. Many of these issues can affect the Fund's or SIR's
actual results and could cause their actual results to differ
materially from those expressed or implied in any forward-looking
statements made by, or on behalf of, the Fund or SIR. There can be
no assurance that SIR will remain compliant in the future with all
of its financial covenants under the Credit Agreement and imposed
by the lender. Given these uncertainties, readers are cautioned
that forward-looking statements are not guarantees of future
performance and should not place undue reliance on them. The Fund
and SIR expressly disclaim any obligation or undertaking to
publicly disclose or release any updates or revisions to any
forward-looking statements. Forward-looking statements are based on
Management's current plans, estimates, projections, beliefs and
opinions, and the Fund and SIR do not undertake any obligation to
update forward-looking statements should assumptions related to
these plans, estimates, projections, beliefs and opinions change,
except as expressly required by applicable securities laws.
In formulating the forward-looking statements contained
herein, SIR Management has assumed that it will be successful in
dealing with the effects of the COVID-19 pandemic and that business
and economic conditions affecting SIR's restaurants and the Fund
will return to normalcy within the medium term.
All of the forward-looking statements made herein are
qualified by these cautionary statements and other cautionary
statements or factors contained herein, and there can be no
assurance that the actual results or developments will be realized
or, even if substantially realized, that they will have the
expected consequences to, or effects on, the Fund or SIR.
For more information concerning the Fund's risks and
uncertainties, please refer to the March 16,
2023 Annual Information Form, for the period ended
December 31, 2022, and the Fund's
Management Discussion & Analysis for Q1 2023, which are
available under the Fund's profile at www.sedar.com.
SOURCE SIR Royalty Income Fund
