Sir Royalty Income Fund SIRZF

Primary Symbol: T.SRV.UN

Consumer Cyclical Restaurants

SIR Royalty Income Fund (the Fund) holds investment in SIR Corp (SIR). The Funds' investment, SIR is engaged in the business of owning and operating full-service restaurants in Canada. SIR has concept restaurant brands, including Jack Astor’s Bar and Grill, Scaddabush Italian Kitchen & Bar, and Canyon Creek Chop House, signature restaurant brands, such as Reds Wine Tavern, Reds Midtown Tavern, Reds Square One, and The Loose Moose, which are used by SIR under a license agreement with SIR Royalty Limited Partnership (the Partnership. The Fund receives distribution income from its investment in the Partnership and interest income from the SIR Loan. The Fund indirectly participates in the revenues generated under the License and Royalty Agreement through its Investment in the Partnership.

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Sir Royalty Income Fund > Hot off the press...

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Comment by BlueJay2020on Mar 12, 2021 9:49pm

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Post# 32791642

RE:RE:RE:RE:RE:RE:Hot off the press...

Don't forget that the Trust hold the trademarks, which would still have some goodwill associated, and could be used to resurrect the business by transferring the leases or acquring new ones.

That's not necessarily a wonderful scenario, but it's not as though the Trust would be completely sunk and assetless without SIR management.

Wordless1 wrote: I bought some around $2.5 and sold at $3.50. Obvioulsy sold way too early but har dot complain when you made money.

I also didn't think the bank would pull the plug. But after reading that update, i made me wonder if they did that as a warning that it's coming? That being said, I don't see how the bank would get their moneyback by pulling the plug either so they should be willing to continue to work with SIR Corp.

In that update, I read that bank is forcing them not to pay the royalties to SRV.UN... Those royalties are somewhere in the $10M range today. The opco was weak before Covid, and Covid has just ravaged it now... Today $39M owed to the bank and $20M in overall payables (including the royalties to SRV.UN), and about $2M of cash on hand - I don't see the bank allowing them to pay those royalties any time soon and I can't imagine how they will ever get out of that hole without some kind of restructuring (even when restaurants do reopen)?

My guess (and it's only a guess) is most of the deferred royalties get foregiven so that they can come out on the other side and start paying royalties again one day. Without SIR Corp, there is no SRV.UN so the Fund should be willing to work with SIR on that front... I hope I'm wrong - Best of luck and I sincerely hope it all works out. Too risky for me.