Century Casinos Announces Racing Entertainment Centre in Calgary
Century Casinos, Inc. (NASDAQ: CNTY) announced today that its subsidiary Century Casinos Europe GmbH ("CCE") signed credit and management agreements with United Horsemen of Alberta Inc. ("UHA") in connection with the development of a proposed race track and entertainment center in Balzac, north metropolitan area of Calgary, Alberta, Canada.
The proposed project would be the only horse race track in the Calgary area and would consist of a 5.5 furlongs (0.7 miles) race track and a Racing Entertainment Centre, including a gaming floor proposing 625 gaming machines, a bar, a lounge, restaurant facilities, an off-track-betting area and an entertainment area. This Racing Entertainment Centre license is the only license still available in any metropolitan area of Alberta. This particular license application pre-dates the AGLC recently approved three-year moratorium on new Casinos and Racing Entertainment Centers, with an option to extend the moratorium for an additional two years.
CCE has agreed to loan to UHA up to CAD 13 million (approximately USD 13 million based on the exchange rate in effect on December 3, 2012) for the exclusive use of developing the proposed project. The loan has an interest rate of LIBOR plus 800 bps, a term of five years and is convertible by CCE into a 60% ownership position in UHA. The Company intends to provide the loan to UHA with borrowings under the Company's Bank of Montreal Credit Agreement.
Once the project is developed and operational and for as long as CCE has not converted the loan into a majority ownership position in UHA, CCE will receive 60% of UHA's net profit before tax as a management fee.
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