Thunderbird Resorts Inc. ("Thunderbird") (FSE: 4TR; and
Euronext: TBIRD) is pleased to announce that its 2018 Half
Year/ Semi –Annual and Unaudited Consolidated Financial Statements
have been filed with the Euronext (“Euronext Amsterdam”) and the
Netherlands Authority for Financial Markets (“AFM”). As a
Designated Foreign Issuer with respect to Canadian securities
regulations, the Half Year/Semi-Annual Report is intended to comply
with the rules and regulations set forth by the AFM and the
Euronext Amsterdam.
Copies of the 2018 Half Year/ Semi – Annual and
Unaudited Consolidated Financial Statements Report in the English
language will be available at no cost at the Group’s website at
www.thunderbirdresorts.com. Copies in the English language
are available at no cost at the Group’s operational office in
Panama and at the offices of our local paying agent ING Commercial
Banking, Paying Agency Services, Location Code TRC 01.013,
Foppingadreef 7, 1102 BD Amsterdam, the Netherlands (tel: +31 20
563 6619, fax: +31 20 563 6959, email: iss.pas@ing.nl).
Copies are also available on SEDAR at www.SEDAR.com.
Below are certain material excerpts from the
full 2018 Semi-Annual Report the entirety of which can be found on
our website at www.thunderbirdresorts.com.
LETTER FROM CEO
The below summarizes the Group’s performance
through June 30, 2018. Because of the sale of Peru gaming
operations in April 2018, through June 30, 2018 we report only
Continuing Operations so that the reader might compare continuing
business with the results of the same businesses through June 30,
2017.
1. PERFORMANCE IN ACCORDANCE WITH OUR PREVIOUSLY-STATED
GOALS1
- Increase our EBITDA2: Peru property EBITDA
improved by $190 thousand for the six months ending June 30, 2018
as compared to the same period in 2017. During the same
period, Nicaragua property EBITDA declined by $389 thousand as
discussed on page 11. Corporate expense increased by $85
thousand due to one-time legal fees related to the Peru asset sale
discussed herein. After netting out Corporate expense and expenses
from our proportional ownership in a Costa Rican real estate
holding company, Adjusted EBITDA decreased by $265 thousand as
compared to through half-year 2017.
- Improve our Profit / (Loss): Based on
Continuing Operations, our Loss worsened by $761 thousand for the
period as compared to the same period in 2017. The decline
was impacted by higher than projected Finance Costs, Net due to
fees incurred in the April 2018 refinancing of our Peru senior
debt, and by one-time Other losses related to restructuring costs
from downsizing our Peru corporate team. Please note that a
material gain from the sale of our Peru gaming assets is reflected
in our “As reported” statements on page 21.
- Decrease our Net Debt: Net debt3 decreased by
$17.3 million as compared to year-end December 31, 2017. The
Group refinanced approximately $4.5 million of its Peru senior
debt, and deployed that debt in part to reduce costs at the Peru
level, which has been reflected in the increased Peru property
EBITDA. We also refinanced and added working capital debt at
the Corporate level.
2. PERFORMANCE ON ASSET SALES
In our September 21, 2016 Annual General and
Special Shareholders’ Meeting, shareholders approved Special
Resolutions that authorized the Board of Directors to:
- Sell “any or all remaining assets of the Corporation in such
amounts and at such times as determined by the Board of
Directors”.
- “In their discretion, without further approval of the
shareholders, revoke this special resolution at any time before the
filing of articles of dissolution under the BVI Business Companies
Act in respect of the foregoing.”
Please note that granting the Board of Directors
the right to voluntarily dissolve the Corporation does not mean
that the same will occur. Approval of Shareholders in advance
allows the Board the flexibility to undertake the same should the
Board of Directors deem it to be in the best interest of
Shareholders based on the circumstances at the time.
Taking all of the above into account, please
kindly see specific notes on the Group’s key remaining assets:
- Peru Gaming Assets: As of April 11,
2018, the Group completed the sale of its Peru gaming assets for a
sale price of approximately $26 million. The Peruvian gaming
operations sold included the Group’s local flagship Fiesta Casino
consisting of approximately 680 gaming positions and 3 other gaming
operations in Peru, with approximately 560 gaming positions. The
sale also included approximately 7,000 m2 of gaming real estate and
150 parking spaces.
- Peru Real Estate Assets: As of the
publication of this 2018 Half-year Report, the Group continued to
operate and wholly own a mixed-use tower containing a 66-suite
hotel, approximately 6,008 m2 of rentable-sellable office space,
and 158 underground parking spaces. The Group continues to
evaluate the best means of optimizing shareholder value from these
assets, and more is expected to be announced in this regard in the
near future.
- Nicaragua Gaming and Real Estate Assets:
As of the publication date of this 2018 Half-year Report, the Group
continued to own a 56% interest in a Nicaraguan holding company
that owns the following assets: i) Gaming: Five full casinos
and two slot parlors with a combined approximately 858 gaming
positions; and ii) Real Estate: Approximately 4,562 m2
of land divided among 5 parcels, and some with tenant improvements
as more fully detailed on page 11. Since March 2018, the
Nicaraguan market has been disrupted by civil protests against and
for the current administration, as well as by the government that
has attempted to reduce protests and establish order. At this
time, the Group believes that it is in the best interest of
shareholders to continue to operate these assets for the
foreseeable future given that any serious interest and recognition
of value can only be achieved once there is more long-term clarity
as to the market conditions.
- Costa Rica Real Estate Asset: As of the
publication of this 2018 Half-year Report, the Group continues to
own a 50% interest in a Costa Rican entity that owns the
11.6-hectare real estate property known as “Tres Rios”. Tres
Rios, with its own, dedicated off ramp, is located close to the
country’s 2nd largest mall on the highway between the capital city
of San Jose and the commuter city of Cartago. Due to the
controversies described in Note 14, section b, to the attached
Financial Statements, it is improbable that the Tres Rios property
will be developed and/or sold in the near future.
We will continue to pursue decisions that will
support the best interest of shareholders according to the
shareholder mandate set forth in the September 21, 2016 Special
Resolutions. We will keep you informed of any material events
and progress as further developments take place.
Salomon GuggenheimChief Executive Officer and
PresidentSeptember 30, 2018
1. Unless otherwise stated, all figures reported
herein are in USD and report the results of those businesses that
were continuing as of June 30, 2018 as compared to those same
businesses through the six months ended June 30, 2017.2. “EBITDA”
is not an accounting term under IFRS, and refers to earnings before
net interest expense, income taxes, depreciation and amortization,
equity in earnings of affiliates, minority interests, development
costs, other gains and losses, and discontinued operations.
“Property EBITDA” is equal to EBITDA at the country level(s).
“Adjusted EBITDA” is equal to property EBITDA less “Corporate
expenses”, which are the expenses of operating the parent company
and its non-operating subsidiaries and affiliates.3. Net debt
equals total borrowings and finance lease obligations less cash,
cash equivalents and other liquid assets.
GROUP OVERVIEW FOR HALF-YEAR
2018
Below is our consolidated profit / (loss)
summary for the six months ended June 30, 2018 as compared with the
same period of 2017.
(In thousands) |
|
|
|
|
|
Six months ended |
|
|
|
June 30 |
|
% |
|
|
|
2018 |
|
|
2017 |
|
Variance |
|
change |
|
Net gaming wins |
$ |
6,373 |
|
$ |
6,337 |
|
$ |
36 |
|
0.6 |
% |
Food and beverage
sales |
|
980 |
|
|
980 |
|
|
- |
|
0.0 |
% |
Hospitality and other
sales |
|
1,658 |
|
|
1,524 |
|
|
134 |
|
8.8 |
% |
Total
revenues |
|
9,011 |
|
|
8,841 |
|
|
170 |
|
1.9 |
% |
|
|
|
|
|
Promotional
allowances |
|
898 |
|
|
850 |
|
|
48 |
|
5.6 |
% |
Property, marketing and
administration |
|
6,397 |
|
|
6,095 |
|
|
302 |
|
5.0 |
% |
Property
EBITDA |
|
1,716 |
|
|
1,896 |
|
|
(180 |
) |
-9.5 |
% |
Corporate expenses |
|
1,043 |
|
|
958 |
|
|
85 |
|
8.9 |
% |
Adjusted
EBITDA |
|
673 |
|
|
938 |
|
|
(265 |
) |
-28.3 |
% |
|
|
|
|
|
Property EBITDA as a
percentage of revenues |
|
7.5 |
% |
|
10.6 |
% |
|
|
Depreciation and
amortization |
|
1,006 |
|
|
1,074 |
|
|
(68 |
) |
-6.3 |
% |
Interest and financing
costs, net |
|
1,725 |
|
|
1,327 |
|
|
398 |
|
30.0 |
% |
Management fee
attributable to non-controlling interest |
|
2 |
|
|
2 |
|
|
- |
|
0.0 |
% |
Foreign exchange (gain)
/ loss |
|
(157 |
) |
|
(31 |
) |
|
(126 |
) |
406.5 |
% |
Other (gains) /
losses |
|
208 |
|
|
(99 |
) |
|
307 |
|
-310.1 |
% |
Loss from equity
investee |
|
14 |
|
|
84 |
|
|
(70 |
) |
-83.3 |
% |
Income taxes |
|
197 |
|
|
142 |
|
|
55 |
|
38.7 |
% |
Profit / (loss)
for the period from continuing operations |
$ |
(2,322 |
) |
$ |
(1,561 |
) |
$ |
(761 |
) |
48.8 |
% |
|
|
|
|
|
Group debt: Below is the
Group’s Gross debt and Net debt on June 30, 2017.
(In thousands) |
|
|
|
Jun-18 |
Dec-17 |
Borrowings |
$ |
15,757 |
$ |
31,749 |
Obligations under
leases and hire purchase contracts |
|
9 |
|
378 |
|
|
|
Gross
Debt |
$ |
15,766 |
$ |
32,127 |
Less: cash and cash
equivalents (excludes restricted cash) |
|
2,901 |
|
1,937 |
Net
Debt |
$ |
12,865 |
$ |
30,190 |
|
|
|
Note: Gross debt above is presented net of
debt issuance costs (costs of debt at time of issuance, which are
currently non-cash and amortize over time) which is why there is an
approximate $22 thousand variance with the total principal balance
below.
The Group estimates its debt schedule as follows starting in
July 2018:
|
|
|
|
|
|
|
|
|
Principal
Balance |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
Thereafter |
Total |
Corporate |
$ |
3,612,957 |
$ |
3,952,719 |
$ |
1,972,950 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
9,538,626 |
Peru |
|
296,181 |
|
618,312 |
|
655,553 |
|
695,682 |
|
740,349 |
|
787,885 |
|
920,423 |
|
4,714,385 |
Nicaragua |
|
264,527 |
|
537,630 |
|
196,742 |
|
61,085 |
|
67,067 |
|
73,634 |
|
334,049 |
|
1,534,734 |
Total |
$ |
4,173,665 |
$ |
5,108,661 |
$ |
2,825,245 |
$ |
756,767 |
$ |
807,416 |
$ |
861,519 |
$ |
1,254,472 |
$ |
15,787,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
Thereafter |
Total |
Corporate |
$ |
343,676 |
$ |
497,915 |
$ |
66,250 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
907,841 |
Peru |
|
143,701 |
|
258,268 |
|
219,177 |
|
176,514 |
|
131,847 |
|
84,311 |
|
17,089 |
|
1,030,907 |
Nicaragua |
|
44,195 |
|
110,815 |
|
64,645 |
|
47,649 |
|
41,668 |
|
35,101 |
|
19,496 |
|
363,569 |
Total |
$ |
531,572 |
$ |
866,998 |
$ |
350,072 |
$ |
224,163 |
$ |
173,515 |
$ |
119,412 |
$ |
36,585 |
$ |
2,302,317 |
|
|
|
|
|
|
|
|
|
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
THUNDERBIRD RESORTS
INC.CONSOLIDATED STATEMENT OF FINANCIAL POSITION(Expressed
in thousands of United States dollars)As of June 30, 2018 and
December 31, 2017
|
June 30, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
Property, plant and
equipment (Note 7) |
$ |
14,827 |
|
$ |
20,690 |
Investment accounted
for using the equity method (Note16) |
|
2,620 |
|
|
2,623 |
Intangible assets |
|
1,509 |
|
|
5,930 |
Deferred tax asset |
|
90 |
|
|
218 |
Trade and other
receivables |
|
799 |
|
|
1,441 |
Due from related
parties (Note 13) |
|
42 |
|
|
42 |
Total non-current
assets |
|
19,887 |
|
|
30,944 |
|
|
|
|
Current
assets |
|
|
|
Trade and other
receivables |
|
2,696 |
|
|
901 |
Due from related
parties (Note 13) |
|
1,846 |
|
|
1,849 |
Inventories |
|
325 |
|
|
396 |
Restricted cash |
|
4,311 |
|
|
1,973 |
Cash and cash
equivalents |
|
2,901 |
|
|
1,937 |
Total current
assets |
|
12,079 |
|
|
7,056 |
|
|
|
|
Total
assets |
$ |
31,966 |
|
$ |
38,000 |
|
|
|
|
THUNDERBIRD RESORTS INC.CONSOLIDATED STATEMENT
OF FINANCIAL POSITION (continued)(Expressed in thousands of United
States dollars)As of June 30, 2018 and December 31, 2017
|
June 30, 2018 |
|
December 31, 2017 |
|
|
|
|
|
|
|
|
Equity and
liabilities |
|
|
|
|
|
|
|
Capital and
reserves |
|
|
|
Share capital
(Note 11) |
|
111,721 |
|
|
|
111,721 |
|
Retained earnings |
|
(102,112 |
) |
|
|
(117,188 |
) |
Translation
reserve |
|
(6,472 |
) |
|
|
(5,384 |
) |
Equity attributable to
equity holders of the parent |
|
3,137 |
|
|
|
(10,851 |
) |
Non-controlling
interest |
|
2,869 |
|
|
|
2,735 |
|
Total equity |
|
6,006 |
|
|
|
(8,116 |
) |
|
|
|
|
Non-current
liabilities |
|
|
|
Borrowings (Note
9) |
|
9,868 |
|
|
|
15,272 |
|
Obligations under
leases and hire purchase contracts (Note 10) |
|
5 |
|
|
|
6 |
|
Deferred tax
liabilities |
|
112 |
|
|
|
115 |
|
Provisions |
|
1,565 |
|
|
|
1,756 |
|
Trade and other
payables |
|
257 |
|
|
|
349 |
|
Total non-current
liabilities |
|
11,807 |
|
|
|
17,498 |
|
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
|
6,478 |
|
|
|
8,394 |
|
Due to related parties
(Note 13) |
|
666 |
|
|
|
895 |
|
Borrowings (Note
9) |
|
5,889 |
|
|
|
16,477 |
|
Obligations under
leases and hire purchase contracts (Note 10) |
|
4 |
|
|
|
372 |
|
Other financial
liabilities |
|
458 |
|
|
|
1,205 |
|
Current tax
liabilities |
|
355 |
|
|
|
365 |
|
Provisions |
|
303 |
|
|
|
910 |
|
Total current
liabilities |
|
14,153 |
|
|
|
28,618 |
|
|
|
|
|
Total liabilities |
|
25,960 |
|
|
|
46,116 |
|
|
|
|
|
Total equity
and liabilities |
$ |
31,966 |
|
|
$ |
38,000 |
|
|
|
|
|
THUNDERBIRD RESORTS, INC.CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME(Expressed in thousands of United States
dollars)For the six months ended June 30, 2018
|
Six months ended |
|
June 30 (unaudited) |
|
2018 |
|
2017 (Restated) |
|
|
|
|
Net gaming wins |
$ |
6,373 |
|
|
$ |
6,337 |
|
Food, beverage and
hospitality sales |
|
2,638 |
|
|
|
2,504 |
|
Total
revenue |
|
9,011 |
|
|
|
8,841 |
|
|
|
|
|
Cost of goods
sold |
|
(2,722 |
) |
|
|
(2,574 |
) |
Gross
profit |
|
6,289 |
|
|
|
6,267 |
|
|
|
|
|
Other operating
costs |
|
|
|
Operating, general and
administrative |
|
(5,616 |
) |
|
|
(5,331 |
) |
Depreciation and
amortization |
|
(1,007 |
) |
|
|
(1,074 |
) |
Other gains and
(losses) (Note 5) |
|
(208 |
) |
|
|
99 |
|
Operating
profit |
|
(542 |
) |
|
|
(39 |
) |
|
|
|
|
Share of loss from
equity accounted investments (Note 16) |
|
(14 |
) |
|
|
(84 |
) |
|
|
|
|
Financing |
|
|
|
Foreign exchange gain /
(loss) |
|
157 |
|
|
|
31 |
|
Financing costs (Note
6) |
|
(1,781 |
) |
|
|
(1,414 |
) |
Financing income (Note
6) |
|
56 |
|
|
|
95 |
|
Other interest (Note
6) |
|
(1 |
) |
|
|
(8 |
) |
Finance costs, net |
|
(1,569 |
) |
|
|
(1,296 |
) |
|
|
|
|
Loss before
tax |
|
(2,125 |
) |
|
|
(1,419 |
) |
|
|
|
|
Income taxes
expense |
|
|
|
Current |
|
(197 |
) |
|
|
(142 |
) |
Deferred |
|
- |
|
|
|
- |
|
Income tax expense |
|
(197 |
) |
|
|
(142 |
) |
|
|
|
|
Loss for the
year from continuing operations |
$ |
(2,322 |
) |
|
$ |
(1,561 |
) |
|
|
|
|
Gain / (loss) for the
year from discontinued operations (Note 8) |
|
17,532 |
|
|
|
265 |
|
|
|
|
|
Loss for the
year |
$ |
15,210 |
|
|
$ |
(1,296 |
) |
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS, INC.CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME (continued)(Expressed in thousands of
United States dollars)For the six months ended June 30, 2018
|
Six months ended |
|
June 30 (audited) |
|
2018 |
|
2017 (Restated) |
|
|
|
|
Other comprehensive income (amounts, which will be
recycled) |
|
|
Exchange differences
arising on the translation of foreign operations |
$ |
(1,088 |
) |
|
$ |
(30 |
) |
Other
comprehensive income for the year |
|
(1,088 |
) |
|
|
(30 |
) |
|
|
|
|
Total
comprehensive income for the year |
$ |
14,122 |
|
|
$ |
(1,326 |
) |
|
|
|
|
Gain / (loss)
for the year attributable to: |
|
|
|
Owners of the
parent |
|
15,076 |
|
|
|
(1,665 |
) |
Non-controlling
interest |
|
134 |
|
|
|
369 |
|
|
$ |
15,210 |
|
|
$ |
(1,296 |
) |
|
|
|
|
Total
comprehensive income attributable to: |
|
|
|
Owners of the
parent |
|
13,988 |
|
|
|
(1,695 |
) |
Non-controlling
interest |
|
134 |
|
|
|
369 |
|
|
$ |
14,122 |
|
|
$ |
(1,326 |
) |
|
|
|
|
Basic and
diluted loss per share (in $): (Note 12) |
|
|
|
Loss from continuing
operations |
|
(0.09 |
) |
|
|
(0.08 |
) |
Gain / (loss) from
discontinued operations |
|
0.65 |
|
|
|
0.01 |
|
Total |
|
0.56 |
|
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS, INC.CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY(Expressed in thousands of United States
dollars)For the six months ended June 30, 2018
|
Attributable to equity
holders of parent |
|
Share capital |
Share options reserve |
Currency translation reserve |
Retained earnings |
Total |
Non-controlling interest |
Total equity |
Balance at
January 1, 2017 |
$ |
110,563 |
$ |
- |
$ |
(5,429 |
) |
$ |
(111,676 |
) |
$ |
(6,542 |
) |
$ |
2,266 |
$ |
(4,276 |
) |
|
|
|
|
|
|
|
|
Transactions
with owners: |
|
|
|
|
|
|
|
Issue of new
shares |
|
48 |
|
- |
|
- |
|
|
- |
|
|
48 |
|
|
- |
|
48 |
|
|
|
|
|
|
|
|
|
|
$ |
48 |
$ |
- |
$ |
- |
|
$ |
- |
|
$ |
48 |
|
$ |
- |
$ |
48 |
|
|
|
|
|
|
|
|
|
Profit / (loss) for the
year |
|
- |
|
- |
|
- |
|
|
(1,665 |
) |
|
(1,665 |
) |
|
368 |
|
(1,297 |
) |
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
- |
|
(30 |
) |
|
- |
|
|
(30 |
) |
|
- |
|
(30 |
) |
Total comprehensive
income for the year |
|
- |
|
- |
|
(30 |
) |
|
(1,665 |
) |
|
(1,695 |
) |
|
368 |
|
(1,327 |
) |
|
|
|
|
|
|
|
|
Balance at June
30, 2017 |
$ |
110,611 |
$ |
- |
$ |
(5,459 |
) |
$ |
(113,341 |
) |
$ |
(8,189 |
) |
$ |
2,634 |
$ |
(5,555 |
) |
|
|
|
|
|
|
|
|
Transactions
with owners: |
|
|
|
|
|
|
|
Issue of new
shares |
|
518 |
|
|
|
|
518 |
|
|
|
518 |
|
Treasury shares issued
as payment |
|
592 |
|
|
|
(393 |
) |
|
199 |
|
|
|
199 |
|
|
|
|
|
|
|
|
|
|
$ |
1,110 |
$ |
- |
$ |
- |
|
$ |
(393 |
) |
$ |
717 |
|
$ |
- |
$ |
717 |
|
|
|
|
|
|
|
|
|
Profit / (loss) for the
year |
|
- |
|
- |
|
- |
|
|
(3,454 |
) |
|
(3,454 |
) |
|
101 |
|
(3,353 |
) |
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
- |
|
75 |
|
|
|
75 |
|
|
- |
|
75 |
|
Total comprehensive
income for the year |
|
- |
|
- |
|
75 |
|
|
(3,454 |
) |
|
(3,379 |
) |
|
101 |
|
(3,278 |
) |
|
|
|
|
|
|
|
|
Balance at
December 31, 2017 |
$ |
111,721 |
$ |
- |
$ |
(5,384 |
) |
$ |
(117,188 |
) |
$ |
(10,851 |
) |
$ |
2,735 |
$ |
(8,116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS, INC.CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY(Expressed in thousands of United States
dollars)For the six months ended June 30, 2018
|
|
|
|
|
|
|
|
|
Share capital |
Share options reserve |
Currency translation reserve |
Retained earnings |
Total |
Non-controlling interest |
Total equity |
Balance at
January 1, 2018 |
$ |
111,721 |
$ |
- |
$ |
(5,384 |
) |
$ |
(117,188 |
) |
$ |
(10,851 |
) |
$ |
2,735 |
$ |
8,116 |
|
|
|
|
|
|
|
|
|
Transactions
with owners: |
|
|
|
|
|
|
|
Issue of new
shares |
|
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
- |
|
|
$ |
- |
$ |
- |
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
$ |
- |
|
|
|
|
|
|
|
|
|
Profit / (loss) for the
year |
|
- |
|
- |
|
- |
|
|
15,076 |
|
|
15,076 |
|
|
134 |
|
15,210 |
|
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
- |
|
(1,088 |
) |
|
- |
|
|
(1,088 |
) |
|
- |
|
(1,088 |
) |
Total comprehensive
income for the year |
|
- |
|
- |
|
(1,088 |
) |
|
15,076 |
|
|
13,988 |
|
|
134 |
|
14,122 |
|
|
|
|
|
|
|
|
|
Balance at June
30, 2018 |
$ |
111,721 |
$ |
- |
$ |
(6,472 |
) |
$ |
(102,112 |
) |
$ |
3,137 |
|
$ |
2,869 |
$ |
6,006 |
|
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS, INC.CONSOLIDATED STATEMENT
OF CASH FLOWS(Expressed in thousands of United States dollars)For
the six months ended June 30, 2018
|
Six months ended |
|
June 30 (unaudited) |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
Cash flow from
operating activities |
|
|
|
Loss for the year |
$ |
(2,322 |
) |
|
$ |
(1,561 |
) |
Items not involving
cash: |
|
|
|
Depreciation and
amortization |
|
1,007 |
|
|
|
1,074 |
|
Unrealized foreign
exchange |
|
(122 |
) |
|
|
(357 |
) |
Decrease in
provision |
|
(439 |
) |
|
|
(107 |
) |
Bad debt expense |
|
- |
|
|
|
14 |
|
Other losses |
|
- |
|
|
|
27 |
|
Gain on derivative
financial instruments |
|
- |
|
|
|
1 |
|
Share based
payments |
|
- |
|
|
|
48 |
|
Finance income |
|
(56 |
) |
|
|
(95 |
) |
Finance cost |
|
934 |
|
|
|
1,414 |
|
Other interests |
|
1 |
|
|
|
8 |
|
Results from equity
accounted investments |
|
14 |
|
|
|
84 |
|
Tax expenses |
|
197 |
|
|
|
142 |
|
Net change in
non-cash working capital items |
|
|
|
Increase in trade,
prepaid and other receivables |
|
(1,321 |
) |
|
|
(5,219 |
) |
Increase in
inventory |
|
(108 |
) |
|
|
(79 |
) |
(Decrease) / Increase
in trade payables and accrued liabilities |
|
(201 |
) |
|
|
326 |
|
Cash used in
operations |
|
(2,416 |
) |
|
|
(4,280 |
) |
Total tax paid |
|
(320 |
) |
|
|
(299 |
) |
Net cash used in
continuing operations |
|
(2,736 |
) |
|
|
(4,579 |
) |
Net cash used in
discontinued operations |
|
(16 |
) |
|
|
(81 |
) |
|
|
|
|
Net cash used
in operating activities |
$ |
(2,752 |
) |
|
$ |
(4,660 |
) |
|
|
|
|
Cash flow from
investing activities |
|
|
|
Expenditure on
property, plant and equipment |
|
(521 |
) |
|
|
(410 |
) |
Proceeds on sale of
Peru Casino operation, net of cash disposed |
|
25,047 |
|
|
|
- |
|
Cost of sale of Peru
Casino operation |
|
(635 |
) |
|
|
- |
|
Interest received |
|
56 |
|
|
|
95 |
|
Net cash used
(used) / from investing activities |
$ |
23,947 |
|
|
$ |
(315 |
) |
|
|
|
|
Cash flow from
financing activities |
|
|
|
Proceeds from issue of
new loans |
|
5,100 |
|
|
|
13,322 |
|
Repayment of loans and
leases payable |
|
(21,671 |
) |
|
|
(5,073 |
) |
Interest paid |
|
(1,011 |
) |
|
|
(689 |
) |
Net cash used
from financing activities |
$ |
(17,582 |
) |
|
$ |
7,560 |
|
|
|
|
|
Net change in
cash and cash equivalents during the year |
|
3,613 |
|
|
|
2,585 |
|
|
|
|
|
Cash and cash
equivalents, beginning of the year |
|
3,910 |
|
|
|
2,867 |
|
|
|
|
|
Effect of foreign
exchange adjustment |
|
(311 |
) |
|
|
209 |
|
|
|
|
|
Included in disposal
group (Note 8) |
|
- |
|
|
|
(878 |
) |
|
|
|
|
Cash and cash
equivalents, end of the year |
$ |
7,212 |
|
|
$ |
4,783 |
|
|
|
|
|
MANAGEMENT STATEMENT ON “GOING
CONCERN”
Management routinely plans future activities
including forecasting future cash flows. Management has reviewed
their plan with the Directors and has collectively formed a
judgment that the Group has adequate resources to continue as a
going concern for the foreseeable future, which Management and the
Directors have defined as being at least the next 12 months from
the filing of our 2017 Annual Report. In arriving at this judgment,
Management has prepared the cash flow projections of the Group,
which incorporates a 5-year rolling forecast and detailed cash flow
modelling through the current financial year. Directors have
reviewed this information provided by Management and have
considered the information in relation to the financing
uncertainties in the current economic climate, the Group’s existing
commitments and the financial resources available to the Group. The
expected cash flows have been modelled based on anticipated revenue
and profit streams with debt funding programmed into the model and
reducing over time. The model assumes no new construction projects
during the forecast period. The model assumes a stable regulatory
environment in all countries with existing operations.
Sensitivities have been applied to this model in relation to
revenues not achieving anticipated levels.
The Directors have considered the: (i) base of
investors and debt lenders historically available to Thunderbird
Resorts, Inc.; (ii) global capital markets; (iii) limited trading
exposures to our local suppliers and retail customers; (iv) other
risks to which the Group is exposed, the most significant of which
is considered to be regulatory risk; (v) sources of Group income,
including management fees charged to and income distributed from
its various operations; (vi) cash generation, debt amortization
levels and key debt service coverage ratios; (vii) fundamental
trends of the Group’s businesses; (viii) extraordinary cash inflows
and outflows from one-time events forecasted to occur in the
12-month period following the filing date of this 2018 Half Year
Report; (ix) ability to re-amortize and unsecured lenders; (x)
level of probability of refinancing of secured debt; (xi)
liquidation of undeveloped and therefore non-performing real estate
assets that have been held for sale; and (xii) level of interest of
third parties in the acquisition of certain operating assets, and
status of genuine progress and probability of closing within the
Going Concern period. The Directors have also considered
certain critical factors that might affect continuing operations,
as follows:
The Directors have also considered certain
critical factors that might affect its continuing operations, as
follows:
- Special Resolution: On September 21, 2016, the Group’s
shareholders approved a special resolution that, among other items,
authorized the Board of Directors of the Corporate to sell “any or
all remaining assets of the Corporation in such amounts and at such
times as determined by the Board of Directors.” This
resolution facilitates the sale of any one or any combination of
assets required to support maintaining of a going concern by the
Group.
- Sellable Pricing of Assets; Asset Sale Schedules and
Re-financing Scenarios: The Group now has sufficient market
feedback, including offers for certain key assets, which have
enabled the Group to incorporate market-determined pricing into its
models; The Group has evaluated the progress of each transaction
that it is working on and has looked at all reasonable scenarios
for the combination and timing of different transactions in
conjunction with sellable pricing.
- Secured debt Refinancing and Cash Flow: Debt service
obligations continue to be a significant part of the Group’s
outflow.
- Corporate Expense and Cash Flow: Corporate expense has
decreased materially in recent years, but still must accommodate
for compliance as a public company.
- Liquidity and Working Capital: As of the date of publication of
this 2018 Half-year Report, the Group forecasts operating with
higher levels of reserves and working capital through the end of
2018 as compared to the previous year. Certain scenarios in
relation to asset sales will not create working capital, while
others will. Selling all or virtually all Group real estate
and reverting cash flow will be critical to creating a healthy
level of working capital reserves for periods beyond the Going
Concern period.
Considering the above, Management and Directors
are satisfied that the consolidated Group has adequate resources to
continue as a going concern for the 12 months following the
reporting period of this 2018 Half-year Report. For these
reasons, Management and Directors continue to adopt the going
concern basis in preparing the consolidated financial
statements.
OTHER GROUP UPDATES
During the half-year ended June 30, 2018, the
Group engaged in the following listed material events:
- Pay-down and deferral of Unsecured Loans: The Group reached an
agreement with a series of unsecured lenders to pay-down
approximately $8.2 million in debt and defer payments on
approximately $5.8 million of their respective loans effective
between April and July 2018. To the extent that certain
lenders were not paid off in full, these lenders agreed to defer
payment of approximately $5.8 million to December 31, 2019. Any and
all interest that accrues during this deferral period shall be
added to the principal balance.
- Cash flow management: In January 2016 the Company
implemented a compensation plan for its officers in order to reduce
the Group’s cost structure to a level that is sustainable.
The Group was reduced to the following personnel: CEO, CFO and
General Counsel all working full time, but with a continued
deferral of 50% or more of their compensation until such time as
there are sufficient cash reserves to pay and/or until such time as
these officers receive shares for their deferred time, which
ongoing agreements will be subject to review by the board’s
Compensation Committee. These Officers continued to dedicated
full-time employment to the Company but discounted a cash portion
of their salaries by approximately $50,000 per month in order to
preserve cash. This “salary deferral” plan has been
re-evaluated on a six month basis and in each period, beginning
July 1, 2016, January 1, 2017 and most recently July 1, 2018, the
board has assessed and approved the plan based on the needs of the
company on a go-forward basis. In consideration of the
extension of the discounting on the cash portion of the salaries,
Officers have reserved the right to collect unpaid compensation
either through stock at market rate or in cash against future
liquidity events.The Company last held its AGM and Special meeting
of shareholders on December 30, 2017. The Company’s Circular
for that AGM/Special Meeting included a recap of the Company’s
issued and outstanding shares and a reference to the “shares for
salary deferral” as follows:Certain members of Management have
entered into a salary deferral arrangement for the period January
1, 2017 to December 31, 2017. Under this arrangement which was
approved by the Company’s compensation committee and the Board, the
Management team has the option to accept additional shares in lieu
of the cash that has been deferred. The potential number of shares
range from approximately 1.5 million to 2.0 million depending on
the average share price throughout 2016 and assuming that share
price remains within the average range in which it has traded over
the 90-day period previous to the publication of this Information
Circular. In order to minimize the issuance of new shares in case
Management opts to accept shares in lieu of cash, Management would
first draw down on those 993,972 shares already purchased by the
Company itself. Effective October 1, 2017, the Company’s
compensation committee and its board approved the Officers’
election to collect unpaid compensation for the period January 1,
2016 to December 31, 2016, and for the period January 1, 2017 to
approximately March 31, 2017, in stock at market rate. This
total cash deferral for 2016 amounted to $505,000. The total
cash deferral for January 1 to March 31, 2017 amounted to
approximately $162,000. In October and November of 2017, Officers
collectively received a total of approximately 2,533,923 shares in
lieu of payment of the total of $667,000 of salary deferral. Of
this 2,533,923 in shares, 993,972 already purchased by the Company
(Thunderbird had previously purchased 283,972 of its own Shares
under its Buy Back Program in 2013. Thereafter, Thunderbird
purchased an additional 710,000 of its own shares separate and
apart from its Buy Back program. The total shares that are owned by
Thunderbird was 993,972 as of December 31, 2016) was transferred by
the Company pro rata to the officers in keeping with the Company’s
Circular for the September 22, 2016 Annual General Meeting.
The balance of 1,539,951 was issued to the Officers as new
shares.
- Amended and Fully Restated Employment Contracts for
Management: Effective July 1, 2018, Management including Salomon
Guggenheim, Peter LeSar and Albert Atallah (collectively “TRI
Employees”) have proceeded to follow the dictates of the Company’s
shareholders and the Board in fulfilling the spirit and intent of
the Special Resolution dated September 21, 2016, wherein, the
Company’s shareholders approved a special resolution as set forth
herein in part as follows:
- The Board of Directors of the Corporation is hereby authorized,
at a time to be determined by the Board of Directors of the
Corporation, to voluntarily dissolve the Corporation pursuant to
the BVI Business Corporate Act of 2004, which winding up process
and dissolution application shall be commenced and implemented at
such time as determined by the Board in their sole discretion;
- The Board of Directors of the Corporation is hereby authorized
to make provision for and to discharge all liabilities of the
Corporation in conjunction with the winding up and dissolution of
the Corporation and in connection with such winding up and
dissolution, is authorized to make a pro rata distribution to
shareholders of the net proceeds available to the Corporation
(after adjusting for carrying costs and other winding up and
dissolution related expenses) from the sale of any or all
remaining assets of the Corporation in such amounts and at such
times as determined by the Board of Directors;
- Any one director or officer of the Corporation be and is hereby
authorized and directed to do all such things and to execute and
deliver all documents and instruments as may be necessary or
desirable to carry out the terms of this resolution, including but
not limited to, the filing of articles of dissolution under the BVI
Business Corporations Act;
- The directors of the Corporation may, in their discretion,
without further approval of the shareholders, revoke this special
resolution at any time before the filing of articles of dissolution
under the Business Corporations Act (BVI) in respect of the
foregoing;
- Granting the Board of Directors the right to voluntarily
dissolve the Corporation does not mean that the same will occur.
Approval of Shareholders in advance allows the Board the
flexibility to undertake the same should the Board of Directors
deem it to be in the best interest of Shareholders based on the
circumstances at the time, without the risk of delay of approval of
specific transactions or the expense of calling another shareholder
meeting to specifically approve such matter. In the event that the
Company proceeds with its plan to liquidate and dissolve, the
company in due course intends to delist from Euronext Amsterdam in
accordance with the rules and procedures of Euronext
Amsterdam.
Management in their respective roles as an
officer and fiduciary continued to act in the best interest of the
shareholders by fulfilling the Company’s public company
obligations. On the other hand, the Company is obligated to
fulfill all relevant employment and labor laws within the
jurisdictions that Employee provides services to the Company. The
Company’s Compensation Committee reviewed the TRI Employment
contracts and recommended to the Board of Directors that the
Company is best served by entering into the employment agreements
with Salomon Guggenheim, Peter LeSar and Albert Atallah. The
Company’s Board of Directors approved the employment agreements
with Salomon Guggenheim, Peter LeSar and Albert Atallah.
Contingencies
Note 22 in the Group’s financial statements for
the year ended December 31, 2017 provides a discussion of all of
the Group’s commitments. There are no material changes in
this disclosure, other than the following update.
- Costa Rica tax controversies
- By way of background, the income tax in Costa Rica is collected
by the General Income Tax Office. The Group’s formerly owned Costa
Rica subsidiaries, Thunderbird Gran Entretenimiento, S.A. (“TGE”),
and Grupo Thunderbird de Costa Rica, S.A. (“GTCR”) are engaged in
two separate tax proceedings. In addition, the Group’s 50%
ownership in King Lion Network is engaged in a tax controversy as
described below.TGE received a proposed income tax assessment in
Q1-2012 of $600 thousand for the tax year ended December 31, 2009,
and a proposed tax assessment of $800 thousand for the tax year
ended December 31, 2010. Additional gaming taxes of $200 thousand
were assessed for each tax year ended December 31, 2009 and
2010. The assessments for both tax years were related to certain
expenses which were deemed to be non-allowable deductions by the
General Income Tax Office and for the imputation of interest income
on intercompany advance balances. These matters were appealed to
the Tribunal Fiscal Administrative (“TFA”) during Q3 and Q4 of
2012. On January 16, 2013, the Group was advised that
the Administrator Tribunal Appeal was denied in regards to the TGE
tax matter. The Group filed a lawsuit at the Court level in August
2014 to revoke the tax assessment. In February 2015, the Group paid
the tax authorities $3.088 million on the alleged tax liability.
The payment to the Costa Rican tax authority was required to be
paid as a condition to closing the sale of the Group’s interest in
Costa Rica to CIRSA, as described below. The payment made by
the Group was made without prejudice or admission of liability. A
hearing in this matter took place in June 2018. The case was ruled
in favor of the Costa Rican Tax Authority. TGE filed
a formal appeal of the tax court decision and the parties are
awaiting the decision. Also, TGE is preparing an unconstitutional
petition to the Constitutional Court to be filed in the ensuing
months.
- San Diego Federal District Court
Controversy
- In June of 2015, Thunderbird Resorts filed a lawsuit in the
Federal District Court, San Diego, against defendants Murray Jo
Zimmer (“Zimmer”), Angular Investments Corp. (“Angular”), Mitzim
Properties, Inc. (“Mitzim Properties”) Taloma Zulu, S.A., (“Taloma
Zulu”) Jack R. Mitchell, (“Mitchell”). The lawsuit alleges breach
of fiduciary duty against Zimmer, Angular and Mitchell; breach of
contract against defendant Mitchell; aiding and abetting, breach of
fiduciary duty against Taloma Zulu and Mitzim Properties; fraud
Civil RICO 18 U.S.C. § 1961, conversion constructive trust and an
accounting against defendants Zimmer, Angular and Taloma Zulu.The
basis of the various claims and allegations in the lawsuit stem
from the following: In 2002, Thunderbird partnered with Angular to
operate casinos and related businesses in Costa Rica. Grupo
Thunderbird de Costa Rica, S.A. (“GTCR”) was formed by Thunderbird
and Angular, who agreed to split all profits from GTCR on an equal,
“50/50” basis. Angular’s principal, defendant Zimmer, became
Thunderbird’s “country manager” for its operations in Costa Rica.
Between July 2007 and September 2014, Zimmer caused GTCR to pay
over $2 million to defendant Taloma Zulu. Zimmer reported to
Thunderbird’s management that these amounts were being paid for
legal and consulting expenses for GTCR to operate in Costa Rica.
Upon further investigation, Thunderbird now believes and alleges
that Zimmer and Mitchell caused Thunderbird’s 50% share of the
amounts paid to Taloma Zulu to be diverted, misappropriated,
embezzled, and/or converted for defendants’ own improper, personal
uses. Thunderbird Resorts is seeking the following relief: awarding
Thunderbird the damages it has sustained by reason of Mitchell,
Zimmer et al conduct, and interest thereon as provided by law;
awarding Thunderbird exemplary and/or punitive damages on account
of defendants’ wilful, wanton, malicious, and/or oppressive
conduct; awarding Thunderbird its costs of suit incurred therein.
Thunderbird Resorts is also seeking the imposition of a
constructive trust in favor of Thunderbird, and against defendants,
of the benefits improperly received by defendants and an order
commanding defendants to return to Thunderbird the funds they
improperly received by way of their wrongful conduct. So far,
Thunderbird Resorts was successful in having the court order
approximately $420 thousand of the defendants’ funds to be
sequestered in the Federal District Court bank account pending
resolution of the case
- In March of 2017, Thunderbird Resorts Inc. obtained a default
judgment in the approximate amount of $659 thousand against
co-defendants Angular Investments S.A. and Taloma Zulu.
- In May of 2017 Jack Mitchell filed a motion to have the claims
made against him submitted to arbitration in Hong Kong alleging
that is the proper forum for Thunderbird Resorts claim. In
addition, Angular Investments S.A. filed a motion to set aside the
$659 thousand default judgment. The Court also granted
Thunderbird leave to file additional pleadings showing default
damages above $657,975, and Thunderbird submitted additional
pleadings showing damages and interest totalling $825,125. In
addition to Angular’s motion to set aside the default judgment,
Angular also filed a motion to dismiss for lack of jurisdiction
which is still under submission.Simultaneously with Thunderbird
Resorts Inc. filing of the San Diego Federal District Court case,
Jack R. Mitchell (“Mitchell”), a former employee of Thunderbird,
brought an arbitration claim in Hong Kong under the International
Court of Arbitration of the International Chamber of Commerce
against Thunderbird. The amount claimed is not less than $518
thousand. By way of background, in September 2012, Thunderbird
Resorts entered into a settlement with Mitchell, following his
termination from the company. Part of that settlement included a
payment to Mitchell of approximately $1.8 million to be paid in
installments over the course of several years. On or about May
2015, Thunderbird Resorts claimed that Mitchell was in default of
his settlement agreement and stopped payment on the settlement
amount. Mitchell instituted arbitration proceedings in Hong Kong
pursuant to the terms of the settlement agreement.
- On September 27, 2017 the International Court of Arbitration of
the International Chamber of Commerce approved its award against
Thunderbird Resorts Inc. in the approximate amount of $518 thousand
plus attorney’s fees and costs of approximately $220
thousand. Thunderbird Resorts intends to pursue all legal
challenges to the award including motions for reconsideration,
appeals and challenges to the award.Thunderbird Resorts made
several request to the Arbitrator that the decision in this matter
be delayed pending submittal of further evidence from the related
matter Thunderbird Resorts Inc. vs. Jo Murray Zimmer, Jack R.
Mitchell, Angular Investments, S.A, Taloma Zulu, Mitzim case no.
15CV1304 JAH BGS filed in the United States District Court for the
Southern District of California in which Mitchell and his
co-defendants are being sued for approximately $1.28 million plus
punitive damages which may rise to the level of three times the
actual damages.
- In March 30, 2018, San Diego Federal District Court Judge
Houston issued an Order Granting Defendant Jack Mitchell’s Motion
to Compel Arbitration which states in part that:“The action is
STAYED as to Defendant Mitchell until such
arbitration has been held in accordance with the terms of the
agreement as set forth by this order. The parties shall file a
joint status report regarding the progression of Arbitration
proceedings no later than September 28, 2018. The
Court addressed the issue of Thunderbird’s counterclaims, which
Thunderbird contended should have been adjudicated by the U.S.
Federal District Court, on pages 6, 7 and 8 of the Order. The
Court’s Order states, in relevant part: The Court must next
determine whether the parties intended to arbitrate the issue of
waiver. The question of whether the remaining five causes of action
have been waived as to Mitchell under the Release and Waiver
provision (Clause 3.2) of the Settlement Agreement is also a
“dispute[], claim[], [or] controvers[y] between the parties arising
out of th[e] Release [and Settlement] Agreement.” The parties
expressly agreed to arbitrate this issue. Therefore, it is for the
arbitrator to decide which claims, or portions thereof, have or
have not been waived, based on the alleged dates of Defendant’s
conduct. Accordingly, the Court GRANTS Defendant’s
Motion to Compel Arbitration whether Plaintiff waived its First,
Third, Fourth, Fifth, and Sixth causes of action, or any portion
thereof, against Mitchell upon execution of the Settlement
Agreement. (Order, pg. 7:1-10.)Section 9.49 of the Arbitration
Award dated September 26, 2017 outlined the Tribunal’s Findings,
stating in pertinent part: “The Claimant [Mitchell] was not in
breach of the Settlement Agreement.” Although the findings are
decisive on the issues raised by Plaintiff in its Eighth Cause of
Action for Breach of Contract, the Tribunal made no findings as to
the issue of waiver. Not having Plaintiff’s counterclaims before
it, the Arbitrator declined to make findings as to the proper
interpretation of the release and waiver clause in paragraph 3.2 of
the Settlement Agreement, stating:By reason of the Tribunal's
findings in paragraphs [9.46] and [9.48] that the Claimant has not
breached clauses 5 and 6 of the Settlement Agreement and was not in
breach of the Settlement Agreement (paragraph 9.49[1]), it does not
need to make a finding as to the proper construction of the release
in clause 3.2 of the Settlement Agreement as no issue of the
Claimant being entitled to rely on Clause 3.2 of the Settlement
Agreement arises.Jack Ray Mitchell v. Thunderbird Resorts Inc.,
Int’l Ct. of Arb. Of the Int’l. Chamber of Commerce, Case No.
21243/CYK/PTA, Ch. 9, 9.50 (2017) (Rooney, Arb.). In light of this
Court’s order granting Defendant’s Motion to Compel Arbitration as
to the issue of waiver and all remaining claims Plaintiff chooses
to pursue in arbitration, the Court finds Defendant Mitchell’s
request to domesticate and enter the Arbitration Award against
Plaintiff premature” (Order, pgs. 7:23-8:13.)
- On September 20, 2018, Thunderbird Resorts Inc., in pro per
petitioned the ICC in respect of its application to the ICC to
re-open the instant arbitration and allow Respondent to file a
counterclaim against Mitchell. On September 24 2018, The
Secretariat replied to Thunderbird Resorts Inc. request to “re-open
the [instant] arbitration and allow Respondent to file a
counterclaim against Claimant” by stating that ICC Case
21243/CYK/PTA was closed after the notification of the decision and
addendum on costs on 25 January 2018. Moreover, as the arbitration
has ended, the case cannot be re-opened. The ICC advised that
Thunderbird Resorts Inc. may initiate new proceedings to bring its
claims against Jay Ray Mitchell. Thunderbird Resorts Inc. initiated
such proceedings by filing a claim with the ICC on September 27,
2018.
- These are the several pending Motions in the Federal District
court proceedings that also impact the Mitchell Arbitration case:
- Angular’s Motion to set aside the default judgment and to
dismiss for Lack of Jurisdiction. In April 2017, Thunderbird
Resorts Inc. properly served Angular, and Angular failed to answer
the complaint within the time period, and the court granted TRI a
Default Judgement in the approximate amount of $657 thousand.
On March 30, 2018 the Court has set aside the default judgment so
the matter has to proceed to trial. As a prelude to the full scale
trial on the matter, The Court ordered an “evidentiary hearing/mini
trial” for May 29, 2018 to focus on these issues: Whether TRI has
“standing” to make the claims against Angular or whether GTCR is
the real proper party in interest. Angular raised a material issue
as to whether Plaintiff was ‘directly’ injured by the alleged
conduct of Zimmer or ‘indirectly’ injured as a result of its
relationship with GTCR. The Court determined that Angular
defense that TRI lacks standing to sue has merit and has ordered
TRI and Angular to present its case in this evidentiary hearing to
determine whether Angular’s conduct was directed at the forum,
i.e., was San Diego the “nerve” center for TRI. The court’s ruling
is now pending following the evidentiary hearing.
- Zimmer’s Motion to Dismiss for Lack of Jurisdiction.
Thunderbird Resorts is diligently prosecuting its claims in the
Zimmer et.al. San Diego Federal District Court Case and estimates
that its monetary value of its claim against MITZIM, Mitchell and
other defendants is $1,282,454.49. This estimate does not include
damages based on other claims outside the scope of the parties’
arbitration agreement, including but not limited to other claims
set forth in Thunderbird Resorts U.S. District Court action against
Mitchell, Murray Jo Zimmer and others
- MITZIM motion to quash writ of attachment.
- Costa Rica-CIRSA Escrow claim In a
related matter to the San Diego Federal District Court action, in
February 2015, the Group had previously consummated Stock Purchase
Agreement (SPA) in which CIRSA acquired the shares of Grupo
Thunderbird De Costa Rica from Thunderbird Resorts Inc. (TRI) and
Angular Investments S.A. The SPA provided that a certain
portion of the monies to be paid by CIRSA to TRI/Angular were to be
held in escrow pursuant to the SPA. In February 2015, CIRSA
delivered USD$2,125,000, to the Escrow Agent (the “Escrow Amount”)
in accordance with the terms and conditions of the SPA. The Escrow
Agreement provided for a claims procedure by which certain claims
could be made by third parties/tax authorities, vendors to be paid
from the Escrow. In December 2017 and in March 2018,
ZIMMER AND FOX as employees of GTCR filed certain claims against
CIRSA, GTCR and TRI. TRI position is that ZIMMER AND FOX are
now claiming in bad faith that they are entitled to a series of
labor rights, The SPA and all related documents supports the fact
that ZIMMER AND FOX as a "seller shareholder" waived and released
any and all claims, rights, etc. that each may have had, including
social benefits under Costa Rica law. TRI believe ZIMMER AND FOX
have waived all their respective claims and therefore their labor
claim are without merit. Based on our information and belief,
ZIMMER intended to file this labor complaint in response to TRI’s
actions against him wherein TRI had filed the aforementioned
lawsuit against ZIMMER in the Federal District Court of San Diego,
California, Zimmer’s is acting in bad faith as he is attempting to
retaliate against TRI for the actions that TRI has taken against
him the USA litigation. TRI believes that ZIMMER’s claim is
without merit and ultimately the labor tribunal made a ruling that
ZIMMER’S claims against GTCR was without merit. In fact, the
Costa Rica labor tribunal already ruled against Zimmer. ZIMMER
filed an appeal of that decision. Nonetheless, TRI disputed each of
the claims that CIRSA made against the Escrow. The general
basis for disputing each of CIRSA’s claims, as well as, any claim
that Thunderbird Resorts Inc. violated the Stock Purchase Agreement
dated February 25, 2015 are completely without basis in law or in
fact. Neither ZIMMER AND FOX are entitled to any payment as set
forth in each of their respective labor cases. Moreover, TRI
position in respect of the issues raised by CIRSA and so called
breach of the SPA is that TRI is not jointly and severally liable
with Angular, Zimmer and Fox. The Fox claim which has not
been served on TRI but only against CIRSA was filed as a way to
place pressure on Thunderbird to help Zimmer in his claim. In
addition, Fox will lose his claim based on the claim being barred
as the statute of limitations will foreclose Fox from succeeding in
the courts.
ABOUT THE COMPANY
We are an international provider of branded
casino and hospitality services, focused on markets in Latin
America. Our mission is to “create extraordinary experiences
for our guests. “Additional information about the Group is
available at www.thunderbirdresorts.com.
Contact: Peter LeSar, Chief Financial Officer ∙
Email: plesar@thunderbirdresorts.com
Cautionary Notice:
Cautionary Notice: The Simi-AnnualReport referred to in this
release contains certain forward-looking statements within the
meaning of the securities laws and regulations of various
international, federal, and state jurisdictions. All statements,
other than statements of historical fact, included in the
Simi-Annual Report, including without limitation, statements
regarding potential revenue and future plans and objectives of
Thunderbird are forward-looking statements that involve risk and
uncertainties. There can be no assurances that such statements will
prove to be accurate and actual results could differ materially
from those anticipated in such statements. Important factors that
could cause actual results to differ materially from Thunderbird's
forward-looking statements include competitive pressures,
unfavorable changes in regulatory structures, and general risks
associated with business, all of which are disclosed under the
heading "Risk Factors" and elsewhere in Thunderbird's documents
filed from time-to-time with the Euronext Amsterdam and other
regulatory authorities. Included in the Simi-Annual Report are
certain "non-IFRS financial measures," which are measures of
Thunderbird’s historical or estimated future performance that are
different from measures calculated and presented in accordance with
IFRS, within the meaning of applicable Euronext Amsterdam rules,
that are useful to investors. These measures include (i) Property
EBITDA consists of income from operations before depreciation and
amortization, write-downs, reserves and recoveries, project
development costs, corporate expenses, corporate management fees,
merger and integration costs, income/(losses) on interests in
non-consolidated affiliates and amortization of intangible assets.
Property EBITDA is a supplemental financial measure we use to
evaluate our country-level operations. (ii) Adjusted EBITDA
represents net earnings before interest expense, income taxes,
depreciation and amortization, equity in earnings of affiliates,
minority interests, development costs, and gain on refinancing and
discontinued operations. Adjusted EBITDA is a supplemental
financial measure we use to evaluate our overall operations.
Property EBITDA and Adjusted EBITDA are supplemental financial
measures used by management, as well as industry analysts, to
evaluate our operations. However, Property and Adjusted EBITDA
should not be construed as an alternative to income from operations
(as an indicator of our operating performance) or to cash flows
from operating activities (as a measure of liquidity) as determined
in accordance with generally accepted accounting principles.
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