Great Canadian Gaming Corporation
TSX : GCD

Great Canadian Gaming Corporation

March 27, 2006 03:01 ET

Great Canadian Gaming Corporation Announces Amendment to Debt Facilities and $80 Million Private Placement

RICHMOND, BRITISH COLUMBIA--(CCNMatthews - March 27, 2006) - Great Canadian Gaming Corporation (the "Corporation")(TSX:GCD) announced today that it has reached an agreement with the lenders of its syndicated bank credit facility and holders of its Series A and Series B Senior Secured Notes (collectively, the "Debt Facilities") to amend certain terms of its Debt Facilities. As part of the agreement to amend the Debt Facilities, the Corporation also announces an $80 million private equity placement.

The amendment of the Debt Facilities and private equity placement prevent the potential default of the Corporation's financial covenants at March 31, 2006 as referenced in the Corporation's press release of March 20, 2006. In connection with the amendment to the debt facilities, the Company has agreed to pay customary amendment fees and increase the interest rate of the Series A and Series B notes for a prescribed period of time.

The Corporation, in conjunction with the amended Debt Facilities and subject to regulatory approval, intends to complete a non-brokered private equity placement of 6,206,361 units (the "Units") of the Corporation. Each Unit will consist of one common share and one common share purchase warrant (the "Warrants") at the price of $12.89 per Unit for gross proceeds of $80 million. Upon exercise, each Warrant entitles the holder thereof to one common share of the Corporation at the exercise price of $12.89 for a period of two years from the closing date. The price per Unit and the Warrant exercise price is the market price, as defined under Toronto Stock Exchange (the "TSX") rules, and is not subject to any discount. No commissions or brokers' fees are payable.

Ross J. McLeod, the Corporation's Chairman and Chief Executive Officer, will participate in the private placement for approximately $50 million of the total offering. Following the placement, Ross J. McLeod will directly or indirectly own 25.9% of the Company on a non-diluted basis.

The proceeds of the private placement will be used to reduce existing debt and for general working capital purposes. The private placement is expected to close immediately upon receipt of regulatory approval, and all units and underlying securities will bear a four-month hold period from the date of issue.

The Corporation intends to file its audited annual consolidated financial statements on or before March 31, 2006. A conference call for investors and analysts is planned subsequent to that release.

About Great Canadian Gaming Corporation

Great Canadian, home to approximately 5,200 employees, is a multi-jurisdictional gaming and entertainment operator with facilities in British Columbia, Ontario, Nova Scotia, and Washington State. Great Canadian operates casinos, thoroughbred and standardbred racecourses, a community gaming centre, hotel, theatre, and various food and beverage facilities.

ON BEHALF OF

GREAT CANADIAN GAMING CORPORATION

"Howard Hum"

Howard Hum, CA, Chief Financial Officer

DISCLAIMER

This news release contains forward-looking statements which reflect management's current expectations regarding the Company's objectives, plans, goals, strategies, future growth, results of operations, performance and business prospects and opportunities. These forward-looking statements include preliminary unaudited results for its fiscal year 2005 and its earnings prospects for fiscal 2006. These forward-looking statements are not guarantees, but only predictions. Although the Company believes that these statements are based on information and assumptions which are current, reasonable and complete, these statements are necessarily subject to a number of factors that could cause actual results to vary significantly from current expectations. Such differences may be caused by factors which include, but are not limited to, ongoing requirements to comply with financial covenants associated with credit facilities, limited terms of operational service agreements with gaming regulators, pending and proposed legislative or regulatory developments, competition from established competitors and new entrants in the gaming business, dependence on key personnel, no assurance that systems, procedures and controls will be adequate to support expanding operations, potential undisclosed liabilities and capital expenditures associated with acquisitions, negative connotations linked to the gaming industry, First Nations claims with respect to public lands on which we conduct our operations, impact of legal proceedings, impact of smoking bans, interest and exchange rate fluctuations, non-realization of cost reductions and synergies, acceptance and demand for new products and services, fluctuations in operating results and general economic conditions. The Company cautions that this list of factors is not exhaustive. These factors and other risks and uncertainties are discussed in the Company's materials filed with the Canadian securities regulatory authorities from time to time, including in the "Risks Factors" section of the Company's Annual Information Form for fiscal 2004, or as identified in the Company's disclosure record on www.sedar.com. The forward-looking statements included in this news release are made only as of the date of this news release and the Company does not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise.

Contact Information

  • For investor inquiries: Great Canadian Gaming Corporation
    Thomas Bell
    Vice-President, Corporate Development & Investor Relations
    (604) 303-1000
    (604) 279-8605 (FAX)
    or
    For media inquiries: Great Canadian Gaming Corporation
    Howard Blank
    Vice-President, Media & Entertainment
    (604) 512-6066
    (604) 279-8605 (FAX)
    www.gcgaming.com
    or
    GREAT CANADIAN GAMING CORPORATION
    13775 Commerce Parkway, Suite #200
    Richmond, British Columbia
    V6V 2V4