Full House Announces Buy-out of Green Acres Management
JUNE 6, 2007. Full House Resorts (AMEX:FLL) announced today that its subsidiary, Gaming Entertainment (Michigan) LLC, ("GEM") jointly owned with RAM Entertainment, LLC, a privately held company, has agreed to acquire the interest of Green Acres Casino Management in the Nottawaseppi Huron Band of Potawatomi casino project in Michigan. Green Acres had a right to a royalty payment based on numerous metrics but which would approximate in excess of 15% of the total management fee received by GEM from the operation of the casino to be located in Emmett Township, Michigan and currently under development. GEM has agreed to pay a total of $10 million, with a down payment of $500,000 on the signing of the agreement. The balance will be due when financing has been obtained in conjunction with the permanent project financing. GEM has been in discussion with Merrill Lynch Pierce Fenner & Smith to arrange an add-on financing security as part of the overall project financing transaction to fund the balance of the Green Acres purchase price. The add-on debt security will be an obligation of GEM and will not be part of the overall casino development cost.
GEM has a management agreement with the Tribe, subject to approval by the National Indian Gaming Commission, to develop and manage the Firekeepers Casino on land recently taken into trust for the benefit of the Tribe. The Tribe has engaged Merrill Lynch to obtain project financing of up to $275 million for this world-class facility. Plans for the casino include 2,500 slot machines, 90 table games, 20 poker tables and related amenities including fine dining, buffet and fast food outlets. Plans also call for a 2,000 vehicle parking structure for the convenience of the casino patrons.
With final governmental approvals expected this summer, the project is on course to commence construction later this year with an opening in 2008.
Mark Miller, Chief Financial Officer of Full House Resorts, reported that "this agreement makes perfect financial sense to us. Based on our estimate of the present value of the Green Acres interest we believe the $10 million purchase price will be very favorable to both Full House Resorts shareholders as well as our partner RAM.
Andre M. Hilliou, Chief Executive Officer of Full House Resorts, said "once again we have been successful in creating new shareholder value by re-working old agreements on terms much more favorable to the company and our constituents."
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