The Keg Royalties Income Fund Announces A Reduction In Distributions to Unitholders
Not for distribution to U.S. News wire services or dissemination in the U.S.
VANCOUVER, British Columbia, April 13, 2020 (GLOBE NEWSWIRE) — The Keg Royalties Income Fund (TSX: KEG.UN or the “Fund”) today announced that it would be reducing the monthly distributions on units of the Fund (“Units”) commencing with the March 2020 distribution. Monthly distributions will be reduced from their current level of $0.0946 per Unit to $0.035 per Unit. The revised monthly distribution of $0.035 per Unit has therefore been declared and will be paid on April 30, 2020 to unitholders of record on April 21, 2020. Annually, the revised distributions result in a decrease from the current level of $1.1352 per Unit to $0.42 per Unit. The Fund currently plans to make those distributions each month for the next six months on the traditional pattern beginning on April 30, 2020, as noted above.“The closure of The Kegs was painful for The Keg as a company, for our guests, our suppliers, and, most importantly, to our fine and loyal employees” continued Aisenstat. “Through no fault of their own or of ours, our restaurant level staff members are currently unable to work. The Keg has financially supported them all, salaried and hourly, as much as possible with what we believe is the most generous plan of any Canadian restaurant company. We want the Keggers to be back in full force, feeling good and with their well-known enthusiasm when we are able to open.”To conclude, Aisenstat said: “The Keg’s financial position is strong and our liquidity is good, so we will get through this unprecedented dark period. We will of course continue to honour all of our obligations, including the payment of royalties to the Fund. We are now very focused on ensuring we are in a position to open quickly when we get the ‘green light’ from the Governments. However, the factor which we are unable to control, or even reliably predict, is when that ‘green light’ will come.”Speaking for the Fund, Chairman Kip Woodward said: “In response to the COVID-related closures of The Keg locations, the Trustees of the Fund needed to make a decision about the Fund’s distribution policy and its ability to make payments at this time. With the cash position of the Fund and assurance from KRL to remain current with its obligation to the Fund, we determined it was not necessary to fully suspend monthly distributions to Unitholders at this time. Our liquidity allows us to use the cash reserves we have carefully retained in the Fund for a ‘rainy day’ and maintain distributions for the next six-month period, albeit at a lower monthly level. It is the sincere hope of the Trustees that the Fund Unitholders will be pleased that, unlike most of our fellow restaurant royalty income funds, our distributions will continue at this point.”The Fund (TSX: KEG.UN) is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership, owns certain trademarks and other related intellectual property used by Keg Restaurants Ltd. (“KRL”). In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool.This press release may contain certain “forward looking” statements reflecting The Keg Royalties Income Fund’s current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those relating to the Keg’s ability to continue to realize historical same store sales growth, changes in market and existing competition, new competitive developments, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund’s financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of the prospectus, nor shall there be any sale of the Fund units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state, province or jurisdiction. The Keg Royalties Income Fund units have not been, and will not be registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an application for exemption from the registration requirement under U.S. securities laws.The Trustees of the Fund have approved the contents of this press release.For media inquiries contact:
Nick Dean, President