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GCGC Announces Debt Refinancing, Issuer Bid

Published: July 5, 2012 1:12 pm ET

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Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian" or "the Company") announced today its intention to refinance its US$161.1 million Senior Secured Tranche B Term Loans ("Tranche B Term Loans"), its US$170.0 million Senior Subordinated Notes ("Subordinated Notes"), and their related cross-currency interest rate swaps with the issue of $400.0 million of 10-year Senior Unsecured Notes (the "New Notes").

The New Notes will be offered in a private placement in Canada under available prospectus exemptions and in the United States to qualified institutional buyers under Rule 144A under the United States Securities Act of 1933 (the "Securities Act"). The New Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act.

The Tranche B Term Loans and Subordinated Notes are currently scheduled to mature in February 2014 and February 2015, respectively. As part of this refinancing, the Company will commence a cash tender offer and consent solicitation with respect to the existing Subordinated Notes (the "Tender Offer"). In addition, the Company will extend the maturity of its $350.0 million Senior Secured Revolving Credit and Swing Line Facility by one year to July 21, 2017. If either the Tender Offer or the planned issuance of the New Notes is unsuccessful, the Company may cancel, postpone or modify its refinancing plans.

The Company also announced today that it intends to make a substantial issuer bid (the "Issuer Bid"), pursuant to which the Company will offer to purchase for cancellation up to $100.0 million of its outstanding common shares from shareholders. Such offer will proceed by way of a fixed price tender at a purchase price of $10.00 per common share (the "Purchase Price"). The Purchase Price under the Issuer Bid represents a premium of approximately 11.2% over the daily volume weighted average trading price of the common shares on the TSX for the 30 trading days preceding the announcement of the bid. If fully subscribed, the Issuer Bid will result in the repurchase and cancellation of approximately 12.7% of the total number of issued and outstanding common shares at July 4, 2012.

The Board of Directors of Great Canadian (the "Board") has determined that the Issuer Bid is in the best interests of the Company and its shareholders and is both an equitable and efficient way to distribute up to $100.0 million to its shareholders, and provides them liquidity at a premium to current market prices. After giving effect to the Issuer Bid, the Company expects that it will continue to have sufficient financial resources to conduct its ongoing operations and property development plans and to pursue new potential business opportunities which may include strategic acquisitions.

The Issuer Bid will not be conditional on any minimum number of the Company's common shares being tendered to the offer, but will be subject to customary conditions and the successful completion of the planned refinancing described above. It is anticipated that the formal offer to purchase, the issuer bid circular and other related documents containing the terms and conditions of the Issuer Bid and instructions for tendering common shares will be mailed to shareholders and filed with the applicable regulators and on SEDAR (www.sedar.com) on July 6, 2012. The Issuer Bid will remain open for acceptance until August 15, 2012, unless withdrawn earlier or extended by the Company. Shareholders are free to tender all, a portion or none of their common shares into the Issuer Bid.

Neither the Company nor the Board will make any recommendation to shareholders whether to tender or refrain from tendering their common shares to the Issuer Bid. Shareholders are strongly urged to consult their own financial, tax and legal advisors and to make their own decisions whether to tender or refrain from tendering their common shares to the Issuer Bid and, if so, how many common shares to tender.

"The refinancing being undertaken at this time will provide Great Canadian with greater term certainty on its long-term debt, while taking advantage of funding in its primary currency offered by the Canadian dollar high yield market," stated Rod Baker, Great Canadian's President and Chief Executive Officer. "Great Canadian continues to enjoy a secure and flexible financial position and the substantial issuer bid represents an opportunity for the Company to return up to $100.0 million of capital to shareholders who elect to tender, while increasing the proportionate ownership interest of shareholders who elect not to tender. We believe that this repurchase is a good use of corporate liquidity, creating value for our shareholders."

This press release is for informational purposes only and is not an offer to buy or a solicitation of an offer to sell any securities of the Company. The Toronto Stock Exchange has neither approved nor disapproved the form or content of this press release.

(GCGC)


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