Ashford Hospitality Trust announced that its Board has created a Special Committee to evaluate strategic alternatives that could reshape the company’s capital structure. The committee will consider options ranging from asset sales and debt restructuring to a transaction that could materially alter the balance sheet.
The move follows the company’s decision to terminate its Series L and M non‑traded preferred stock offerings and to suspend redemptions of all outstanding preferred shares. Management said the action is intended to address a valuation gap between the market price of the common stock and the underlying value of the hotel portfolio.
CEO Stephen Zsigray explained that the company has been steadily reducing leverage through asset sales and improving EBITDA, but the market has not reflected those gains. “We remain frustrated by the discrepancy between the value of our underlying portfolio and the market value of our common stock,” he said, underscoring the need for a proactive review.
The special committee will explore a range of options, including further asset divestitures, refinancing of debt, and a potential transaction that could change the company’s capital structure. The company has already sold several hotels to lower debt and has a retention package in place for Zsigray to ensure continuity during the review.
Investors have reacted positively to the announcement, viewing the committee as a step toward unlocking shareholder value. The company’s focus on addressing the valuation gap aligns with a broader trend among REITs that are seeking strategic alternatives to correct undervaluation.
The termination of preferred stock offerings and suspension of redemptions will limit liquidity for holders of those securities, but the company believes the long‑term benefits of a more efficient capital structure outweigh the short‑term inconvenience.
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