A portion of the Company’s corporate offices are leased from Allied Pacific Properties and Hotels Ltd. ("APP"), a minority shareholder of the Company. During the three and nine months ended September 30, 2006, the Company paid rent to APP, pursuant to the lease, of which $6,000 and $18,000, respectively (2005 - $10,000 and $41,000) is included in SG&A under the sub-heading of general expenses in the analysis above. During 2005 the Company negotiated a lease cancellation for part of the office space, resulting in a reduction from the 2005 expense. In addition, APP sold part of the leased premises to a third party, and rent payments for this space are no longer related party transactions.
Included in amounts due to related parties is a loan of $6.0 million (2005 - $10.1 million) due to Allied Holdings Ltd ("Holdings"), the Company’s majority shareholder. This loan, which is unsecured and due on demand, bears interest at a fixed rate of 9.0% per annum. During the three and nine months ended September 30, 2006 the Company paid interest to Holdings of $152,000 and $582,000, respectively (2005 - $97,000 and $278,000), which amounts are included in other interest expense.
Included in amounts due to related parties is a loan of $7.9 million (2005 – $6.8 million) due to APP. This loan, which is secured by a general security agreement and due on demand, bears interest at a rate of prime plus 0.75% per annum. During the three and nine months ended September 30, 2006, the Company paid interest to APP of $128,000 and $349,000, respectively (2005 - $84,000 and $215,000).
