Baymount Incorporated has announced that it has reached an agreement with Macallan Equity Inc. to provide financing for the company's subsidiary
, Belleville Racetrack Development Corporation (BRDC).
Under the agreement, Macallan will provide BRDC with an initial advance of $3 million and will have the right to acquire a 50% equity interest in BRDC upon delivery of a further $1 million.
The initial advance will be used for the purposes of refinancing Baymount's outstanding secured convertible debentures and certain liens registered against BRDC, and to enhance the working capital positions of BRDC and Baymount.
Macallan has deposited the initial $3 million advance in escrow with Baymount's solicitors. That advance is expected to be released during the week of January 25, 2010 against a mortgage in favour of Macallan once discharges and releases from the convertible debenture holders and consents from other lienholders have been delivered to BRDC.
Upon satisfaction of certain further conditions, Macallan may then contribute an additional $1 million and convert the initial $3 million advance to a 50% equity interest in BRDC. That transaction is subject to entry into by BRDC of construction agreements and construction loan agreements on terms acceptable to Macallan, confirmation of minimum working capital in BRDC of not less than $100,000 and other standard conditions, including but not limited to completion of due diligence and receipt of all applicable regulatory approvals.
This transaction replaces the previously announced investment from Plaza Gaming and Entertainment Corp. that did not close as contemplated late last year.
Baymount continues to hold a 100% interest in its 55 acres of excess lands adjacent to the new QRS in Belleville, Ontario. These lands are not part of the transaction with Macallan, and Baymount continues to work with its prospective partners in developing these lands into the Prince Edward Gateway family entertainment destination, which plans to feature a new hotel and water park in addition to many other amenities.
(With files from Baymount)