BRAEMAR HOTELS & RESORTS INC. : Completion of Acquisition or Disposal of Assets, Unrecorded Sale of Equity Securities, Settlement FD Disclosure, Financial Statements and Exhibits (Form 8-K)


At March 14, 2022, Braemar Hotels & Resorts Inc. (the “Company”) announced that the March 11, 2022the Company and its indirect wholly-owned subsidiary, BHR Dorado LLC (the “Purchaser”), completed the acquisition of the Ritz-Carlton Dorado Beach Hotel (the “Hotel”) at Porto Rico and the revenue stream attributable to the 14 adjacent luxury residences currently participating in a rental management program (the “Residences” and, together with the hotel, the “Property”) pursuant to a purchase and sale agreement, dated December 24, 2021
(the “Purchase Agreement”), by and between the Company, the Buyer and DBR Hotel Owner LLC (seller”).

The total purchase consideration consisted of (i) $104 million in cash, payment of the Hotel loan with Financing KHRE SMA, LLCof which
$54 million is outstanding, and (ii) the issuance of 6,000,000 common shares of the Company, par value $0.01 per share (“ordinary shares”). The cash portion of the consideration was funded by cash on hand.

In connection with the completion of the acquisition of the Property and the issue of the Ordinary Shares, the Company and the Seller have entered into an Investor Rights Agreement, dated March 11, 2022 (the “Investor Rights Agreement”), pursuant to which, among other things, the seller (i) is subject to a customary standstill clause, (ii) has agreed to vote all common shares held pursuant to upon the recommendation of the Board of Directors of the Company, and (iii) is not authorized to make certain transfers of Common Shares unless made in an open market transaction in accordance to an effective registration statement. The Investor Rights Agreement also grants the Company a right to redeem the common shares at a price per share equal to the greater of (x) five dollars ($5.00) and (y) the closing price of the Common Shares on the day immediately preceding the redemption date.

The presumed indebtedness consists of $54 million principal amount outstanding and bears interest at LIBOR (to which a floor of 0.75%) plus 6% applies. The assumed debt has a maturity date of March 4, 2024, with two one-year renewal periods, under certain conditions. The assumed debt may be repaid by the Company at any time subject to (i) an exit fee of 0.50%, and (ii) if repaid within nine months of the acquisition of the Property , the payment of all interest which would have become due to the lender if the debt assumed had remained unpaid up to the date which falls nine months after the acquisition of the property.


Based in part on the statements of the seller in the purchase agreement, the company’s offer of 6,000,000 shares of common stock to the seller pursuant to the purchase agreement was exempt from registration under Article 4 (a)(2) of the Securities Act. of 1933, as amended (the “Securities Act”). The seller has represented that it is an accredited investor, as that term is defined in Rule 501(a)(3) of Regulation D under securities law, and is acquiring the shares at investment purposes only and not for the resale, distribution or other disposition of shares in violation of the United States federal securities laws.


At March 14, 2022, the Company has issued a press release announcing the closing of the acquisition of the property, as further described in this Report on Form 8-K. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Section 7.01 and any attachments hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act, except to the extent expressly indicated by specific reference in such filing.


(a) Financial Statements. To the extent that financial statements are required to be filed with this item, such financial statements will be filed by amendment to this current report on Form 8-K no later than 71 calendar days after the date on which this current report on Form 8-K is due. must be filed.

(b) Pro forma financial information. To the extent that pro forma financial information is required to be filed by this item, such financial information shall be filed by amendment to this current report on Form 8-K no later than 71 calendar days after the date on which this current report on Form 8 – K must be archived.

(d)  Exhibits

Exhibit Number     Description

99.1 Company press release, dated March 14, 2022
104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

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