DALLAS, June 26, 2000 (PRIMEZONE) -- American Realty Trust, Inc. (NYSE:ARB) announced Monday that the company and its advisor, Basic Capital Management, have entered into a letter of intent with an unaffiliated lender, reached agreements with margin lenders and received a commitment letter from a bank to refinance the companies' margin debt and provide working capital for ART.
American Realty and Basic Capital have entered into a non-binding letter of intent with an affiliate of United Capital Corp. (ASE:AFP) to refinance $10 million of ART's existing margin debt, and in a separate transaction, refinance $32 million of Basic Capital's existing margin debt. Each of the financings with the United Capital affiliate is subject to completion of due diligence, execution of definitive agreements and certain other matters which ART expects to accomplish over the next few days. After this financing is completed, American Realty will have approximately $18.25 million of margin debt outstanding and Basic Capital will have approximately $1.5 million of remaining margin debt outstanding.
ART and BCM also have reached agreements with approximately 80 percent of their remaining margin debt lenders whereby these lenders will refrain from selling margined shares for up to six months, subject to periodic payments on the remaining margin debt.
In addition, American Realty Trust has received a commitment letter from a banking institution for a loan that will be secured by real estate interests owned by ART. The amount of the loan will be determined by the appraised net value of the real estate interests but will not exceed $30 million. Funds from this loan are to be used to further pay down margin debt and for working capital purposes. The bank loan is subject to a due diligence review, appraisals and execution of definitive loan documents.
ART can offer no assurance as to the timing of the consummation of the transactions contemplated by the non-binding letter of intent and the commitment letter.
Dallas-based American Realty Trust, Inc. owns a diverse portfolio of properties located across the United States, as well as interests in mortgage loans and stock holdings in Income Opportunity Realty Investors, Inc. (AMEX:IOT), Transcontinental Realty Investors, Inc. (NYSE:TCI) and National Realty, L.P. (AMEX:NLP). For more information on the company, go to the Investor Data page of its web site at www.amrealtytrust.com .