FOG CUTTER CAPITAL GROUP INC. REPORTS SALE OF MORTGAGE-BACKED SECURITIES AND NEW LOAN FUNDINGS
June 16, 2004
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FOR:
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FOG CUTTER CAPITAL GROUP INC.
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CONTACT:
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Fog Cutter Capital Group Inc.
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(503) 721-6500 Andrew A. Wiederhorn, Chairman and CEO
(503) 721-6500 R. Scott Stevenson, Chief Financial Officer
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For Immediate Release
FOG CUTTER CAPITAL GROUP INC. REPORTS SALE OF MORTGAGE-BACKED SECURITIES AND NEW LOAN FUNDINGS
PORTLAND, Oregon.— June 16, 2004 -- Fog Cutter Capital Group Inc. (Nasdaq: FCCG) reports that it has sold two mortgage-backed securities totaling $30.2 million. Proceeds from the sales were partially used to retire debt totaling $24.3 million. The Company will recognize a gain on the sales of approximately $1.0 million during the second quarter of 2004. The sales represent the completion of the Company’s strategy to transition out of mortgage securities and into higher yielding special situation real estate lending.
During the first half of 2004, Fog Cutter funded special situation real estate loans totaling $7.7 million. Security for the loans includes single family residences, a warehouse facility in Nevada, a vineyard in central California and an apartment complex in Barcelona, Spain. The loans typically mature in less than two years and have effective annual yields to the Company in the 15% to 30% range. The Company also has commitments to fund additional loans in Barcelona and Bermuda totaling $4.2 million.
The business strategy of Fog Cutter Capital Group consists of developing, strengthening and expanding its restaurant and commercial real estate mortgage brokerage operations and continuing to identify and acquire real estate investments with favorable risk-adjusted returns. The Company also seeks to identify and acquire controlling interests in other operating businesses in which it can add value. The Company’s operating segments consist of (i) restaurant operations conducted through Fatburger Holdings, Inc., (ii) commercial real estate mortgage brokerage activities conducted through George Elkins Mortgage Banking Company and (iii) real estate, merchant banking and financing activities.
Forward Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in such statements. All of the statements contained in this release, which are not identified as historical, should be considered forward-looking. In connection with certain forward-looking statements contained in this release and those that may be made in the future by or on behalf of the company which are identified as forward-looking, the company notes that there are various factors that could cause actual results to differ materially from those set forth in any such forward-looking statements. Such factors include but are not limited to, the real estate market, the specialty retail market , the availability of financing, interest rates, and European markets. Accordingly, there can be no assurance that the forward-looking statements contained in this release will be realized or that actual results will not be significantly higher or lower. The forward-looking statements have not been audited by, examined by, or subjected to agreed-upon procedures by independent accountants, and no third party has independently verified or reviewed such statements. Readers of this release should consider these facts in evaluating the information contained herein. The inclusion of the forward-looking statements contained in this release should not be regarded as a representation by the company or any other person that the forward-looking statements contained in this release will be achieved. In light of the foregoing, readers of this release are cautioned not to place undue reliance on the forward-looking statements contained herein.
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