WASHINGTON—Jan. 13, 2003—MeriStar Hospitality Corporation (NYSE: MHX), the nation`s third largest hotel real estate investment trust (REIT), today announced that it had received payment on its outstanding note receivable from Interstate Hotels & Resorts (NYSE: IHR), which was due in 2007. Under the terms of the agreement, MeriStar received $42.1 million, plus accrued interest, in settlement of the $56.1 million note. Proceeds from the transaction will be added to MeriStar`s cash reserves to enhance the company`s liquidity and financial flexibility.
“This transaction, combined with recent asset sales, significantly improves our liquidity and provides a substantial cash operating cushion,” said Donald D. Olinger, chief financial officer. “We currently have no borrowings under the credit facility and expect to carry higher cash balances during 2003. We also do not anticipate the need to access our bank credit facility or the capital markets. However, as we achieve greater visibility on our operations we may use a portion of our available cash to reduce our overall leverage.”
Washington, D.C.-based MeriStar Hospitality Corporation owns 106 principally upscale, full-service hotels in major markets and resort locations with 27,432 rooms in 26 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Radisson and Doubletree. For more information about MeriStar Hospitality Corporation, visit the company`s Web site: www.meristar.com.