Janus Completes Refinancing Of Four Hotels

BOCA RATON, FL— Janus Hotels and Resorts has completed a short-term refinancing of four hotels it owns in the Cleveland market. The hotels include: the Holiday Inn, Independence; the Holiday Inn, Hudson; the Holiday Inn, North Canton; and the Comfort Inn, Akron.      Janus said it began withholding debt service payments from its lender on the four properties effective Nov. 1, 2001, due to the downturn in hotel occupancy following 9/11. The company then entered into a settlement agreement with the lender where the lender agreed to assign its interest in loans having an outstanding principal balance of about $42.27 million plus accrued and unpaid interest of approxinately $2.29 mllion (not including default rate interest), for a payment of $38.5 million inclusive of a forbearance fee of $180,000 and miscellaneous costs. The sources of funds for this payment were a $33.5 million loan from a new lender; $1.5 million of property and equipment replacement reserves maintained for the applicable properties; and about $3.5 million in debt service payments that were deposited in a segregated bank account, according to Janus. Janus said the new lender modified the terms of the loans by reducing the aggregate outstanding principal balance to $33.5 million offering a variable rate of “prime” plus 0.5%, which changed the amount of monthly principal payments and the due date of the loans to Aug. 1, 2003.      The settlement will produce a pre-tax gain of approximately $7.15 million, which will be reported in the third quarter of 2002, but will not produce any positive cash flow, according to Janus. The company said it believes that no federal taxes will result as it intends on utilizing available net operating losses.     Janus currently owns 13 hotels and manages 38 hotels.