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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.
On March 16, 2020, Keg Restaurants Ltd. (“KRL”) and the Fund announced the temporary closure of all 107 Keg locations across Canada and in select US states. At that time, KRL explained the decision was a result of the impending COVID-19 spread. The company felt it was a necessary step in order to protect the health and safety of The Keg’s guests, employees and the communities in which The Keg operates. Very quickly thereafter, Governments at various levels in each of their jurisdictions validated KRL’s decision by ordering the closure of all dine-in restaurants until further notice.
In that initial announcement, senior management of KRL anticipated the closures would last at least two weeks and indicated more updates would be provided as the situation evolved. Unfortunately, and tragically, the spread of COVID-19 has escalated since that time at great human loss and with far reaching lifestyle changes as we all try to do our part to minimize the spread of the virus. It would now appear to be nearly certain that no re-openings will be possible for The Keg or our fellow restaurant companies before June in a best case scenario.
“In its forty-nine year history, The Keg has been through many different cycles and events - some good and some difficult.” said David Aisenstat, CEO of KRL. “We have come through them all with our brand and business fully intact. We have not seen anything like the magnitude of COVID-19 and its devastating trail, but we are confident we will survive these dark days with our brand and business fully intact once again.”
“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