Toronto, Ontario (CANADA) June 24, 2002 AFM Hospitality Corporation (TSX:AFM) one of North Americas leading hospitality franchise and management companies, announced today that it has received regulatory approval to complete the acquisition of the ten management contracts from Heyde Hospitality as previously announced on May 1, 2002. This acquisition represents more than 1,000 rooms located in Minnesota and Wisconsin, eight of which operate under the Park Plaza or Park Inns brands. This acquisition was completed on June 18, 2002 through AFMs wholly-owned subsidiary, Northwest Lodging International (USA) Inc.
Through its subsidiaries, Northwest Lodging International (USA) Inc. and Northwest Lodging International (Canada) Inc., AFM now has more than 48 hotel properties under management services contract in Canada and the U.S.A.
Rapid expansion is a key strategic initiative of AFMs management services division, said Stephen Phillips, Vice-Chairman and CEO of AFM. The acquisition of additional management services contract builds upon our established infrastructure of high quality human resources and captures additional revenue streams in the hospitality industry.
AFM also announced that two new, distinguished individuals have been elected to its Board of Directors at the Annual and Special Meeting of Shareholders held on June 11, 2002.
Mr. Per-Odd Keul, Chairman, President and Chief Executive Officer of Asia-Europe-Americas Bank, brings to the board a strong and knowledgeable international financial background.
Mr. Keul is based in Seattle, Washington. Mr. Mahesh Hathiramani controls various hotels that are franchised and/or managed by AFM and brings valuable insight and experience from a hotel-owners perspective. Mr. Hathiramani is based in Toronto, Ontario including business interests in Hong Kong, China.
We are pleased with the business acumen and broad experience brought to the board by these new directors. We are also encouraged by the quality of individuals that are interested in participating in our board, says Lawrence P. Horwitz, Chairman of the Board of AFM. The expanded board brings the skills and experience necessary to guide AFM through its planned strategic growth in the future, both in the franchising and management services divisions he added.
At the Annual and Special Meeting of the Shareholders held on June 11, 2002, the previous seven directors were also re-elected for a further one-year term. Disinterested shareholders also unanimously approved amendments to the existing employee stock option plan as well as unanimously approving the creation of an employee stock purchase plan. Full particulars of such amendments were set out in the information circular circulated for such meeting (and available at www.sedar.com ).
The shareholders unanimous support of all proposals at the recent shareholder meeting is a clear endorsement of AFMs new business plan and strategic direction implemented by management and the Board, declared Stephen Phillips, Vice Chairman and C.E.O. We are pleased that all shareholders understand and support the initiatives we have taken to grow AFM into the largest multi-brand hospitality franchise and management services company in Canada and one of the largest in North America, he added.
Through its subsidiaries, AFM Hospitality Corporation owns AFM Preferred Alliance Group Inc., AFM Asset Management Inc., Northwest Lodging International (USA) Inc. and Northwest Lodging International (Canada) Inc. It is the exclusive Canadian Master Franchisor for ASTON, Best Inns, Hawthorn Suites, Howard Johnson, Knights Inn, Park Plaza, Park Inn, Ramada, Travellers Inn, Villager Lodge and La Quinta Inns. AFM Hospitality Corporation operates or has open and/or executed franchise and management agreements with more than 220 hotels in North America, representing an inventory of over 22,000 hotel rooms. The companys primary focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, and acquire other franchise businesses related to the hospitality industry, while making available property management services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSX:AFM). AFM Hospitality Corporation system-wide sales for branded hotels in its franchise portfolio and properties operated by the company exceed CDN $325 million per year. AFM Hospitality Corporation may be
reached at www.afmcorp.com.