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Century Casinos, Inc.
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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