ATLANTA, GA— Lodgian has reportedly completed a public offering of 18,285,714 shares of its common stock at $10.50 per share, with the net proceeds of $177 million derived from the stock offering slated to be used to: redeem the company’s Series A preferred stock ($116. 2 million); fund capital expenditures ($35.2 million); fund a reserve account pursuant to requirements in the company’s debt refinancing ($3 million); and for general corporate purposes and the company’s growth strategy. In addition, it was noted certain significant holders of Lodgian’s Series A Preferred Stock exchanged shares of their outstanding Series A Preferred Stock, valued at approximately $41.4 million, for approximately 3.9 million shares of common stock at $10.50 per share. The total number of common shares outstanding following the offering and preferred stock exchange has been put at 24.5 million. Lodgian sources maintained the company has similarly granted the underwriters an option to purchase up to an additional 2,742,857 common shares to cover any overallotments. Merrill Lynch & Co. and Citigroup Global Markets acted as co-lead managing underwriters for the offering, and Banc of America Securities LLC, Legg Mason Wood Walker and Raymond James & Associates were co-managers. In a separate move, the company also reported the concurrent refinancing of $370 million of its outstanding mortgage debt. A $110-million floating-rate facility secured by 29 hotels was priced at LIBOR plus 340 basis points for a two-year term plus three one-year extensions. A five-year, fixed-rate $260-million facility secured by 35 hotels carries an interest rate of 6.58%. Merrill Lynch Mortgage Lending provided the refinancing. As a result, it was contended the company’s long-term debt has been reduced to $425 million (excluding debt related to properties held for sale) and has a weighted average interest rate of approximately 6.7%.
