InterAmerican Gaming, Inc. announced today that it has entered into a non-binding letter of intent with Signature Gaming Management Peru
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SGM, a private entity formed to pursue gaming opportunities in Peru, has entered into certain agreements with the Jockey Club of Arequipa ("JCA") located in Arequipa, Peru, including management of the newly constructed Carro Colorado Racetrack and leasing space in the JCA-owned Social Club, located in the historical city center of Arequipa. Arequipa is a city with approximately 1.4 million people and is considered to have the highest per capita income in Peru due to the extensive mining and agricultural operations.
The SGM agreement for the leased space at the Social Club is for the purpose of operating slot machines and conducting race and sports wagering. The LOI intends for IAG to provide up to USD$500,000 in project financing for which it will receive controlling interest in SGM, a loan with a security interest in both SGM and the JCA agreements, be the exclusive provider of gaming equipment on a fee per unit per day basis and receive certain management and incentive fees.
IAG and SGM anticipate closing the proposed transaction within 45 days. Closing is subject to further due diligence, certain customary conditions precedent and all requisite approvals required by Direccion General de Juegos de Casinos y Magquinas, including board approval from both companies.
"This opportunity is an important step in implementing our corporate strategy," said John Simmonds, Chairman and CEO of IAG. "Since our subsidiary IAG-Peru became licensed to import and commercialize slot machines in Peru last year, we have been working on expanding our slot operations within the country. Through this LOI, IAG is providing the funding to operate a casino in Peru's second most populated city of Arequipa, along with supporting the long and proud history of horseracing in the area. I am very excited to work with Signature Gaming on making this a great success."
Michael Hlavsa, controlling shareholder of SGM stated: "We look forward to working with IAG to develop this project. We have believed in the opportunity for quite some time and believe that our new partnership will be key to the success of this project."
In February of this year, IAG-Peru installed 60 slot machines at Fantasy Club Del Peru SA locations, operating under various brands throughout the country: "Slot City" in Chiclayo, "Monos Dorados" in Huacho and Huaral. IAG, in conjunction with Fantasy, will be installing an additional 20 machines in the city of Chincha in April.
(With files from InterAmerican Gaming, Inc.)