“Morgans’ Board is advancing its strategic plan to improve liquidity, reduce costs and corporate overhead, recapture the entrepreneurial spirit and excitement that was once this Company’s hallmark, and return Morgans Hotel Group to its rightful place as the leading international boutique hotel platform.”About Morgans Hotel Group Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first “boutique” hotel and a continuing leader of the hotel industry’s boutique sector. Morgans Hotel Group operates Delano in South Beach, Mondrian in Los Angeles, New York and South Beach, Hudson in New York, Morgans and Royalton in New York, Clift in San Francisco, Shore Club in South Beach and Sanderson and St Martins Lane in London. Morgans Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group has other property transactions in various stages of development, including five hotels currently under construction, comprised of Delano properties in Las Vegas, Nevada and Moscow, Russia; and Mondrian properties in Baha Mar in Nassau, The Bahamas, London, England, and Doha, Qatar. Morgans Hotel Group also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com. Forward-Looking and Cautionary Statements This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “overestimate,” “underestimate,” “believe,” “could,” “project,” “predict,” “continue” or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, both in the U.S. and internationally, particularly as it impacts demand for travel, hotels, dining and entertainment; our levels of debt, our ability to refinance our current outstanding debt, repay outstanding debt or make payments on guaranties as they may become due, our ability to access the capital markets and the ability of our joint ventures to do the foregoing; our history of losses; our ability to compete in the “boutique” or “lifestyle” hotel segments of the hospitality industry and changes in the competitive environment in our industry and the markets where we invest; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, terrorist attacks, the threat of terrorist attacks and similar disasters; and other risk factors discussed in Morgans Hotel Group’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and other documents filed by Morgans Hotel Group with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans Hotel Group assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
Morgans Hotel Group Co. (NASDAQ:MHGC) (“Morgans”), the New York-based hospitality management company, announced today that it has successfully refinanced its $180 million mortgage loan secured by Hudson in New York and its $100 million revolving credit facility secured by Delano South Beach. The mortgage loan and credit facility were refinanced with nonrecourse mortgage and mezzanine loans with an aggregate principal amount of $450 million, which was fully funded at closing. The new loan is secured by mortgages encumbering Hudson and Delano South Beach and pledges of equity interests in certain subsidiaries of Morgans and matures on February 6, 2016, with three, one-year extension options subject to certain conditions. The loan was provided by Citigroup Global Markets Realty Corp. and Bank of America, N.A. The net proceeds from the new Hudson and Delano South Beach mortgage loans were used to (1) repay $180 million of outstanding mortgage debt under the prior Hudson loan, (2) repay $37 million of indebtedness outstanding under Morgans revolving credit facility secured by Delano South Beach, (3) provide cash collateral for reimbursement obligations with respect to a $10 million letter of credit under the revolving credit facility, and (4) fund reserves required under the new Hudson and Delano South Beach mortgage loans, with the remainder available for general corporate purposes and working capital, which may include the repayment of other indebtedness. Jason T. Kalisman, Chairman of the Board and interim Chief Executive Officer of Morgans Hotel Group, said: “One of the top priorities of the Morgans Board, since being elected by Morgans’ shareholders in June 2013, has been to address the Company’s legacy balance sheet issues. We are pleased to have successfully completed the refinancing of the debt of Hudson and Delano South Beach on attractive terms that provide the Company with additional liquidity and extend key maturities on these properties while maintaining flexibility with these assets. This gives us the liquidity to address the Company’s current maturities and we believe this puts the Company in a much stronger financial position.