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Cygnus Capital, Inc. Responds to Recent Amendments to Exchange Offers of Ashford Hospitality Trust, Inc. and Conclusion of the Special Meeting

ATLANTA, Oct. 27, 2020 /PRNewswire/ -- Cygnus Capital, Inc. (together with its affiliates, "Cygnus Capital"), one of the largest stockholders of Ashford Hospitality Trust, Inc. (the "Company" or "AHT") (NYSE:AHT), beneficially owning approximately 9.4% of the Company's outstanding common stock, today responded to AHT's recent announcements. While Cygnus Capital is pleased that the Board had decided to conclude the previously adjourned special meeting of stockholders, Cygnus Capital believes the continuation of the exchange offers serve as an unnecessary distraction and AHT management and the Board should refocus its efforts on other strategic initiatives to preserve value for all stockholders.  

Cygnus Capital calls upon the independent directors of the Board to take bolder and more decisive action to hold AHT management and its external manager, Ashford, Inc. ("AINC"), accountable, including the following:

  • Immediately terminate the exchange offers. In Cygnus Capital's view, the recent amendments to eliminate the cash consideration in the exchange offers now make the exchange offers significantly less appealing and serve little purpose to improve the Company's immediate liquidity needs. Cygnus Capital urges AHT's management and Board to immediately terminate the exchange offers.
  • Increase transparency on alternative strategic options and AHT's liquidity position. Cygnus Capital continues to believe that the independent directors of the Board should hire its own independent investment advisor to fully evaluate other strategic alternatives, including to:
    • significantly reduce AHT's cost structure, including to reduce or eliminate the fees payable to AINC and other related parties;
    • explore a sale to a stronger REIT;
    • obtain a bridge loan at AHT's corporate level to weather the current COVID-19 related crisis; and
    • undertake a rights offering that could raise capital without diluting existing commons stockholders.
  • Continue to reduce or defer the fees paid to AINC by AHT. The recently announced deferral of fees payable by AHT to AINC for 30 days is a step in the right direction but does not go far enough. Cygnus Capital calls upon the Board to reduce or eliminate the fees paid to Lismore Capital LLC, a subsidiary of AINC, for debt restructuring as these fees appear to be a double dip on fees already paid by AHT to AINC.
  • Realign the advisory fees paid by AHT to AINC so that such fees incentivize growth of AHT's market capitalization instead of the growth of enterprise value. AINC should be paid to grow the value of the equity, not balloon the size of the debt load carried by the Company.
  • Reduce or eliminate the perception and reality of related party transactions. AHT cannot be run as a fee conduit to Chairman of the Board, Monty Bennett, his family and other AINC insiders. The market has seen through these transactions. Unwinding, reducing or eliminating them will unlock the value potential in AHT.

AHT management themselves have said $1.6 billion in equity value recovery is possible. Cygnus Capital agrees if the independent directors continue to take action to hold Chairman Bennett and AINC accountable. 

About Cygnus Capital, Inc.

Cygnus Capital, Inc. is an integrated real estate investment and alternative asset management company focused on opportunistic, special situation, and distressed real estate investments.  Cygnus Capital targets long term, absolute returns for investors by applying a differentiated approach to real estate investing.  By placing an emphasis on the acquisition, workout, and disposition of real estate debt assets characterized by their complexity, inefficiency, and niche qualities, Cygnus Capital is able to target superior, absolute returns for its investors. Cygnus Capital and its affiliates own in the aggregate 64,189 shares of the Company's Series D Preferred Stock, 140,464 shares of the Company's Series F Preferred Stock, 167,361 shares of the Company's Series G Preferred Stock, 213,313 shares of the Company's Series H Preferred Stock, and 162,216 shares of the Company's Series I Preferred Stock.


Christopher Swann
CEO, Cygnus Capital, Inc.
(404) 465-3685 office
(917) 407-7971 cell

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SOURCE Cygnus Capital, Inc.

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