BURNABY, BRITISH COLUMBIA, Oct 25, 2006 (CCNMatthews via COMTEX News Network) NEWS RELEASE
Gateway Casinos Income Fund (the "Fund") (TSX:GCI.UN) is pleased to announce that its operating entity, the Gateway Casinos Limited Partnership (the "Partnership"), has closed the development financing announced on May 1, 2006. The Partnership has entered into an agreement with a syndicate of Canadian chartered banks, led by BMO Bank of Montreal and including Royal Bank of Canada and the Bank of Nova Scotia, to provide total debt financing of $220 million. Funds will be used to provide construction financing for the Burnaby redevelopment and the expansion / relocation of the Lake City Casinos in Kamloops, Kelowna and Vernon. The total financing comprises a $30 million revolving credit facility, a $175 million committed construction facility and a $15 million committed contingency facility. The Fund believes that the new credit facilities will provide sufficient resources to finance the complete Burnaby redevelopment and the expansion / relocation of the Lake City Casinos in Kamloops, Kelowna and Vernon.
June 30 2nd qtr financial Results
Vernon Casino The Vernon Casino is currently located in 12,000 square feet at the Village Green Hotel. It was opened in 1998 and no longer reflects the populations’ expectations. The Fund’s plans envision relocating the facility to a newly developed 300,000 square foot neighborhood shopping center located on Highway 97 in the north end of Vernon. This is a high traffic location in the middle of a new large-scale retail and business park development, convenient to the city population and the North Okanagan trading areas. The new casino is anticipated to be located in 25,000 sq. ft of leased space on the ground floor of a brand new three-story building. The Fund is contemplating a facility with up to 400 slot machines and electronic games, a pub-style restaurant/lounge with stage area to host entertainment and promotional events. Subsequent to the end of the second quarter of 2006, the Fund finalized negotiations and entered into a long-term lease for the property. The lease has an initial term of ten years, commencing on the date that the building is complete, and provides for two renewal terms of five years each. The project is expected to take between 16 and 18 months for completion.
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