Gateway Casinos & Entertainment Ltd. — the company chosen by the province to run its casinos — has announced a refinancing plan that will be used, in part, to fund its new Ontario acquisitions.
The “Ontario acquisitions” include casinos in Thunder Bay and Sault Ste. Marie, slots in Sudbury (at Sudbury Downs) and two planned casino builds in Kenora and North Bay, as well as a casino in Point Edward and slots in Woodstock, London, Clinton, Dresden, and Hanover.
The company said in a Feb. 3 release the plan would include a CDN$125-million senior secured revolving credit facility, a US$440-million senior secured term loan facility, and US$255 million of second priority senior secured notes due 2024.
With the funds, the company said it would:
• repay all outstanding amounts under Gateway’s existing senior secured credit facility;
• redeem Gateway’s outstanding 8.50 per cent second priority senior secured notes due 2020 in the aggregate principal amount of C$200 million; and
• finance the acquisitions from the Ontario Lottery and Gaming Corporation of certain gaming properties in Ontario, which are expected to be completed in the second quarter of 2017. The Ontario acquisitions are expected to be immediately accretive to Gateway’s top-line growth, EBITDA margin and full year earnings. The use of proceeds will also include funding new developments and ongoing operations in Western Canada.
Gateway, based in Burnaby, B.C., was announced on Dec. 13 as the provider chosen by Ontario Lottery and Gaming (OLG) to take over the operation of gambling operations across Ontario.
Gateway must meet certain conditions before the deal’s closure, which is expected this coming spring.
