Century Casino, Inc. announced that subsidiaries of VICI Properties Inc. have entered into a final agreement to purchase property assets in Century Casino Edmonton, Century Casino St. Albert and Century Mile Racecourse and Casino for cash. Century Casino Inc. includes CAD $192.3 million ($144.4 million at May 16, 2023) to be paid to Century Casino subsidiaries and approximately CAD $29.4 million ($21.8 million at May 16, 2023) to acquire commission simple real estate interest from owners. The Company expects to hold approximately $154.5 million ($114.6 million at exchange rate as of May 16, 2023) of the purchase after the purchase, sale costs, Canadian and U.S. taxes and proceeds of Century Downs land are paid to minority owners.
Upon the closing of the transaction, the Century Canada portfolio will be added to the existing TripleNet Masterless Agreement (“Masterless”) between the VICI subsidiary and our subsidiaries, with annual rent increased by 17.3 million cad ($12.8 million at exchange rate on May 16, 2023) representing an implied underwriting capital ratio of 7.8%. MASTER LESS, which is pending acquisition of Rocky Gap Casino Resort and Century Canada Portfolio, is expected to have a real estate-level rent guarantee ratio of approximately 2.0x.
The period of the master lease will also be extended, giving you a full initial lease period of 15 years and four five-year renewal options at the end of the transaction. The Company’s obligations under Master Lease will continue to be guaranteed by Century Casino Inc.
“We are excited to expand our good partnership with VICI into our Canadian portfolio,” said Erwin Heitzman and Peter Höchinger, co-CEOs of Century Casino. “This deal opens up the property value of Canadian properties while continuing our Canadian operations and provides greater financial flexibility as we continue to grow.” We plan to use the proceeds from the sale for Nuggets’ improvement funds and general corporate purposes. We are also looking at the possibility of applying some proceeds to debt repayment under credit contracts or returning funds to shareholders through share repurchase and/or special dividends. We continue to evaluate the optimal use of our capital,” they concluded.
The transaction is subject to customary regulatory approval and closing conditions and is expected to close in the second half of 2023.