CorePoint Lodging Inc. (CPLG)

[Enterprising Investor]

CorePoint Lodging Provides Second Quarter Business Update and Announces Exploration of Strategic Alternatives (7/13/21)

RVING, Texas, July 13, 2021 (GLOBE NEWSWIRE) -- CorePoint Lodging Inc. (NYSE: CPLG) (“CorePoint” or the “Company”), a pure play select-service hotel owner strategically focused on the midscale and upper-midscale segments, today provided a business update for the second quarter ended June 30, 2021 and announced that its Board of Directors, working together with financial and legal advisors, has decided to explore strategic alternatives to maximize stockholder value.

“The sequentially improving performance of our portfolio of select-service hotels has continued to demonstrate the benefits of our positioning predominantly in suburban, drive-to destination, and leisure markets, allowing us to capture growing demand,” noted Keith Cline, President and Chief Executive Officer of CorePoint. “We have created substantial value through the execution of our non-core disposition strategy. Having addressed over 80% of the 210 hotels we identified as non-core, and given the strong market interest in our assets, the Board has determined now is the proper time to explore strategic alternatives to fully maximize value for our stockholders.”

Second Quarter Business Update

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Information is based on comparable hotels, which consists of all of the 175 hotels owned by CorePoint as of June 30, 2021. Average daily rate (“ADR”) represents hotel room revenues divided by total number of rooms rented in a given period and revenue per available room (“RevPAR”) is defined as the product of ADR charged and the average daily occupancy achieved.

The Company continued to execute on its non-core disposition strategy with 25 non-core hotels sold in the second quarter, for a combined gross sales price of approximately $143 million during the quarter, resulting in 175 hotels owned as of June 30, 2021. An additional 36 hotels are under contract for sale to qualified buyers and are expected to generate approximately $220 million of gross proceeds.

The Company utilized proceeds from the dispositions to repay $125 million in CMBS debt during the quarter, resulting in $564 million of CMBS debt outstanding as of June 30, 2021, and paid down $5 million on its revolving credit facility for a balance outstanding of $75 million as of June 30, 2021.

CorePoint expects to report its second quarter financial results on August 5, 2021.

Exploration of Strategic Alternatives

The Board of Directors intends to consider a full range of available strategic alternatives to maximize stockholder value, including a potential sale of the Company or other transactions. There is no set timetable for the Board of Directors to review alternatives, and there can be no assurance that the exploration of strategic alternatives will result in any transaction or other action. Any potential transaction or other strategic alternative would be dependent on a number of factors that may be beyond the Company’s control. The Company does not intend to discuss or disclose further developments unless and until the Board of Directors approves a specific action or otherwise concludes the review of strategic alternatives.

J.P. Morgan Securities LLC is serving as lead financial advisor to CorePoint, Hodges Ward Elliott, LLC as co-advisor, and Simpson Thacher & Bartlett LLP as legal counsel to CorePoint.

About CorePoint

CorePoint Lodging Inc. (NYSE: CPLG) is the only pure-play publicly traded U.S. lodging REIT strategically focused on the ownership of midscale and upper-midscale select-service hotels. CorePoint owns a geographically diverse portfolio in attractive locations primarily in or near employment centers, airports, and major travel thoroughfares. The portfolio consists of primarily La Quinta branded hotels. For more information, please visit CorePoint’s website at www.corepoint.com.

https://www.globenewswire.com/news-release/2021/07/13/2262350/0/en/CorePoint-Lodging-Provides-Second-Quarter-Business-Update-and-Announces-Exploration-of-Strategic-Alternatives.html