ShoLodge To Possibly Spin-Off InnLink Subsidiary

HENDERSONVILLE, TN— ShoLodge Inc. is considering the feasibility of spinning off its InnLink subsidiary to its shareholders. InnLink would go on to acquire the controlling interest in a new bank to be formed here. The resulting company would apply to the Federal Reserve Board to become a financial services holding company, owning both the new bank and InnLink, which would continue to operate as a travel services company. Consideration of the transaction is in the early stages. A number of contingencies would need to be satisfied in order for ShoLodge to proceed, including obtaining board approval, obtaining a revenue ruling or other satisfaction that the spin-off would be tax free to shareholders of ShoLodge, approval of the new banks charter by appropriate state and federal regulators, and a financial services holding company application by the Federal Reserve Board, along with compliance with various loan, indenture and other contractual commitments of ShoLodge. “As we have focused more in the direction of franchising and developing hotels for others, we have looked at a variety of alternatives to maximize shareholder value,” said Leon Moore, CEO of ShoLodge. “We see great opportunity in the community-based financial services businesses and are exploring the spin-off of our travel services subsidiary as a means to enter those businesses.” While the company is seriously considering the move, Leon warns, “There are, of course, several obstacles that would need to be overcome before any final decision is made.”