MONTICELLO, N.Y. (AP) ¿ Struggling gaming company Empire Resorts Inc. said Wednesday it will receive $55 million in new capital from investment company Kien Huat Realty III Ltd. in exchange for stock representing just under 50 percent of Empire's voting power.
The funds will come in two rounds. Empire already issued on Wednesday to Kien Huat around 6.8 million shares, or 19.9 percent of outstanding shares, for a total of $11 million. And subject to shareholder approval, the company will issue Kien Huat around 27.7 million shares for an additional $44 million.
Once this is completed, Kien Huat will own around 34.5 million shares for a total investment of $55 million and give Empire Resorts $10 million in a credit facility. Proceeds will be used for working capital and to pay down debt.
Under the terms of the agreement, Kien Huat can appoint three representatives to the company's board of directors, including a non-executive chairman. G. Michael Brown and Colin Au have been designated to serve as directors, with Brown designated as chairman. Kien Huat will designate a third director upon closing of the second tranche.Kien Huat has interests in companies that are involved in gaming, leisure and hospitality industries, among others. Shares of the company rose 81 cents, or 41.1 percent, to finish at $2.78.