Empire Resorts Announces Receipt of $35 Million Loan Company Repays All Obligations under Its Outstanding Convertible Senior ...
November 19 2010 - 7:00AM
Business Wire
Empire Resorts, Inc., (NASDAQ: NYNY) today announced that it has
entered into a loan agreement with Kien Huat Realty III Limited
(“Kien Huat”), the company’s largest stockholder, pursuant to which
Kien Huat has provided the Company with a loan in the aggregate
principal amount of $35 million (the “Loan”). The Company used the
proceeds of the Loan, together with available funds, to repay in
full the company’s obligations under its 5½% convertible senior
notes due 2014 (the “Notes). The repayment of the Notes from the
proceeds of the Loan was made in accordance with the terms of that
certain settlement agreement entered into by the Company on
September 23, 2010 among the trustee under the indenture governing
the Notes and the beneficial owners of the Notes party thereto. In
connection with the repurchase of the Notes, the Company and the
beneficial owners of the Notes have resolved all outstanding claims
and the beneficial owners of the Notes have agreed to release all
liens on the Company’s assets.
Empire Resorts Chairman of the Board Emanuel R. Pearlman
commented, “The Board of Directors is pleased to have closed this
loan and repurchased our notes. It is an important initial step and
leaves us well positioned to move the company forward.”
The Loan bears interest at the rate of 5% per annum, payable
monthly. The loan matures on the earlier to occur of the
consummation of the Company’s proposed rights offering and June 30,
2011, subject to extension under certain circumstances. The Company
intends to conduct a rights offering upon terms to be determined by
the board of directors of the Company. In the rights offering, if
conducted, the Company would distribute to all holders of the
Company’s common stock a non-transferrable right to purchase
additional shares of the Company’s common stock at a price of
$0.8837 per share, which is equivalent to the conversion price of
the restated notes that would have been issued pursuant to the
settlement agreement if the Notes had not been repurchased. Kien
Huat has committed to exercise all of its basic rights to purchase
additional shares allocated to Kien Huat with respect to its
current ownership of the Company’s common stock. If, upon the
completion of the rights offering, the proceeds of the rights
offering are insufficient to repay in full all amounts outstanding
on the Loan, the full amount remaining unpaid will be extended for
a term of two years at an interest rate of 5% per annum convertible
into the Company’s common stock at a price equal to the $0.8837 per
share exercise price of the rights to be issued in the rights
offering.
Empire Resorts CEO Joseph D’Amato added, “The restructuring of
our indebtedness is an important milestone for Empire Resorts. As a
result of this transaction, the company has over $7 million in
working capital. We look forward to focusing on the completion of
our rights offering which will further enhance the company’s
financial position. We are optimistic that resolving these
financing matters will allow Empire Resorts to focus on our ongoing
efforts to enhance shareholder value.”
This news release shall not constitute an offer to sell or a
solicitation of an offer to buy securities, nor shall there be any
sale of these securities in any state or jurisdiction in which such
an offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Empire Resorts
Empire Resorts owns and operates the Monticello Casino &
Raceway, a harness racing track and casino located in Monticello,
New York, and 90 miles from midtown Manhattan. For additional
information, please visit www.empireresorts.com.
Cautionary Statement Regarding Forward Looking
Information
Statements in this press release regarding the Company’s
business that are not historical facts are “forward-looking
statements” that may involve material risks and uncertainties. The
Company wishes to caution readers not to place undue reliance on
such forward-looking statements, which statements are made pursuant
to the Private Securities Litigation Reform Act of 1994, and as
such, speak only as of the date made. For a full discussion of
risks and uncertainties, which could cause actual results to differ
from those contained in the forward-looking statements, see “Risk
Factors” in the Company’s Annual Report on Form 10-K for the most
recently ended fiscal year, as amended, as well as the Company’s
Quarterly Report on Form 10-Q for the most recently ended fiscal
quarter.
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