DALLAS, June 26 2000 (PRIMEZONE) -- Basic Capital Management, Inc. announced Monday that the company and its affiliate, American Realty Trust, Inc. (NYSE:ARB), have entered into a letter of intent with an unaffiliated lender, reached agreements with margin lenders and entered into a commitment letter with a bank to refinance the companies' margin debt and provide working capital for ART.
Basic Capital and American Realty have entered into a non-binding letter of intent with an affiliate of United Capital Corp. (AMEX:AFP) to refinance $32 million of BCM's existing margin debt, and in a separate transaction, refinance $10 million of ART'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 that Basic Capital expects to accomplish over the next few days. After this financing is completed, Basic Capital will have approximately $1.5 million of remaining margin debt outstanding, and American Realty will have approximately $18.25 million of margin debt outstanding.
BCM and ART 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 with 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 properties, 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.
BCM can offer no assurance as to the timing of the consummation of the transaction contemplated by the non-binding letter of intent and the commitment letter.
Basic Capital Management, Inc. is a Dallas-based real estate advisory company. American Realty Trust 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 companies, go to the web site at www.bcm-inc.com .