Lakes Entertainment, Inc. (LACO)
announced today that Evitts Resort, LLC, (“Evitts”) its wholly owned subsidiary, closed on a $17.5 million financing facility with Centennial Bank (the “Facility”) on Monday, December 17, 2012. The Facility will be used to finance a portion of the conversion of existing convention space into a gaming facility, provide replacement meeting room space, and refurbish the hotel lobby and guest rooms at Rocky Gap Lodge & Golf Resort (“Rocky Gap”). Evitts acquired Rocky Gap, which is located near Cumberland, Maryland, in August of this year, and is currently operating the existing hotel, restaurants, spa and golf course while the renovations take place. The new gaming facility will feature approximately 550 video lottery terminals, a casino bar and a new lobby food and beverage outlet. Evitts is required to invest $17.5 million in the Rocky Gap project, including the original purchase price, prior to making a draw on the Facility. Any funds drawn on the Facility will bear interest at the rate of 10.5% per annum. The loan is collateralized by the leasehold estate and the furniture, fixtures and equipment of Rocky Gap. As further collateral, Lakes Entertainment, Inc. guaranteed repayment of the loan and granted a second mortgage on its real property located in Minnetonka, Minnesota. Repayment of the loan will be interest only for the first year, with payments of principal and interest amortized and paid over the subsequent seven years.
Tim Cope, President and CFO of Lakes stated, “Completing this financing allows us flexibility with the remaining cash on our balance sheet to look for other opportunities that will enhance shareholder value. We look forward to opening the new gaming facility in the second quarter of 2013, with the new meeting space to be completed soon after.”
About Lakes Entertainment
Lakes Entertainment, Inc. currently owns the Rocky Gap Lodge & Golf Resort near Cumberland, Maryland. Lakes has a management agreement with the Shingle Springs Band of Miwok Indians to manage the Red Hawk Casino. Lakes has an investment in Rock Ohio Ventures, LLC’s casino developments in Ohio.