Baymount Incorporated announces that it is working with the Ontario Lottery and Gaming Corporation to complete an amendment to its construction loan
agreement for $14.2 million plus accrued interest, which was initially announced on July 9, 2008.
The loan is for the construction of the new Quinte Raceway and Slots in Belleville, Ontario. While the principal amount and term of the agreement is expected to be substantially the same, it is expected there will be new operating and financial covenants and other requirements of Baymount and its wholly owned subsidiary Belleville Racetrack Development Corporation. Baymount and BRDC also have a number of conditions that must be met on a specific timeline prior to any additional funds being drawn against the new construction loan, including the refinancing of the Company's $3 million convertible debentures. BRDC has currently drawn approximately $92,000 of the construction loan.
Baymount also announces that it has entered into a Memorandum of Understanding with Pacrim Hospitality Services Inc. for the development of a hotel and water park on the company's excess lands located adjacent to the proposed new Quinte Raceway and Slots facility. Under the terms of the agreement, Pacrim has exclusivity to conduct due diligence and negotiate with Baymount or its assignee for the development of a hotel and water park on these lands with an expiration date of April 24, 2009. Pacrim has advised Baymount that it is now engaged in developing preliminary design concepts for the proposed facility. Pacrim is one of the largest privately-owned hotel management and development companies with a managed portfolio of 57 hotels throughout Canada and the United States.
Baymount has also entered into an amended agreement on the sale of its excess lands. The closing of the transaction has been extended to April 15, 2009. The purchaser and Baymount have agreed to transfer the lands to a special purpose vehicle to be named for the proposed development - Prince Edward Gateway Corporation. PEG is in the process of completing a Master Plan for the entire development, which, in addition to the proposed hotel/waterpark, is excepted to also call for additional recreational, retail and hospitality elements. The Company has agreed to subscribe for up to fifty percent of PEG and in the event that Baymount does not move forward with the development of the new Quinte Raceway and Slots, the Purchaser's deposit will be granted subordinated mortgage security.
Additionally, the Company is currently in negotiations with 2062480 Ontario Inc., the Trustee representing the convertible debenture holders. The $3 million of convertible debentures were due December 31, 2008. Under a previous agreement, Baymount prepaid the interest up to February 28, 2009. Baymount is working with the Trustee and debenture holders to discharge, amend or extend the outstanding debentures and has retained an investment firm, subject to Board approval, to assist with refinancing the convertible debentures as well as raising additional capital for the Company. Any extension, amendment or refinancing of such debentures will be subject to receipt of the approval of the TSX Venture Exchange.
The National Capital Region Harness Horse Association has also notified Baymount that they have agreed in principle to our negotiated contract and that they will put it forward to a ratification vote on March 11, 2009.
Baymount also announces that its offering of up to $1.5 million of units at price of $0.035 per unit (as previously announced on December 23, 2008 and January 28, 2009) is ongoing. To date, an aggregate of approximately $634,000 in gross proceeds have been raised and Baymount continues to make contact with additional potential subscribers. Each unit will consist of one common share of Baymount and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share at a price of $0.07 for a period of 12 months from closing. Closing is expected to continue to occur in multiple tranches, as subscription proceeds and supporting documentation are received. The proceeds from this subscription will be used to build and develop the Quinte Raceway and Slots, a new racetrack and slot facility to be located in Belleville, Ontario and for working capital purposes.
(Baymount)