Peak Resorts to sell stock: Deal will raise $20 million for operating costs

Peak Resorts to sell stock: Deal will raise $20 million for operating costs

EB-5 Visa, EB5 Visa, EB-5 Investment

Peak Resorts Inc., parent company of Mount Snow, announced that it has reached an agreement to sell $20 million of Series A convertible preferred stock and warrants to purchase common stock to CAP 1 LLC, a family client of Summer Road LLC. 

In conjunction with this private offering, Summer Road will also have the right to nominate a person for election to Peak’s board of directors. Peak Resorts expects to use the proceeds from this offering for working capital and general corporate purposes and for the execution of its strategy for future growth, including expansion through acquisition.

As previously reported, Peak Resorts’ current cash position is restrained due to delays in the release of funds raised pursuant to the US Citizenship and Immigration Services EB-5 Program, and the negative effects that unseasonably warm weather had on revenues during the 2015-2016 ski season. The company believes that this investment will provide it with increased flexibility to meet short- and long-term liquidity and maintain flexibility for future funding of ongoing operations, growth, and strategic investments. 

Key transaction details include: the preferred stock is convertible upon a change of control, or after nine months, into common shares equal to the number of shares to be converted times the liquidation value divided by $6.29; preferred stock has an initial nine-month, dividend-free period with a subsequent cumulative dividend of 8% per annum on the liquidation value of $1,000 per share; and the preferred stock is redeemable by the company after three years at 125% of the liquidation value, plus accrued and unpaid dividends if the common stock trades at more than 130% of the conversion price for a 30-day period. 

Peak Resorts has an option to issue to Summer Road an additional $20 million in shares. Summer Road also has certain additional rights, including pre-emptive rights, rights of first offer, director nomination rights and approval rights over certain changes in the business and certain acquisitions.

The proposed transaction is subject to certain closing conditions, including the reduction by the company’s senior lenders, EPT Ski Properties Inc., and EPT Mount Snow Inc., in the additional interest reserve requirement related to the breakage of the Fixed Charge Coverage Ratio Covenant. The proposed transaction also requires the approval of the company’s shareholders. At the annual meeting of shareholders, currently scheduled to take place at the end of October, the shareholders will be asked to vote upon the authorization of additional common stock, the authorization of blank check preferred stock, and certain conforming changes to the company’s amended and restated articles of incorporation and the authorization of the transaction under the Nasdaq Listing Rules. Assuming satisfaction of all conditions, the transaction is expected to close in late October or early November.$20-million-for-operating-costs?instance=news_page



  • Missouri

Securities Disclaimer

This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.