Baymount Incorporated has announced that it has closed on the first phase of its agreement with Macallan Equity Inc., announced on January 22, 2010, which refinances
Baymount's subsidiary, Belleville Racetrack Development Corporation (BRDC). Under the agreement, Macallan provided BRDC with an initial advance of $3 million and has the right to acquire a 50% equity interest in BRDC upon investment of a further $1 million.
The $3 million was used for the purposes of refinancing Baymount's outstanding secured convertible debentures and other secured debt and to enhance the working capital positions of BRDC and Baymount. Baymount's secured convertible debenture has been paid down by approximately 50%, with the remaining principal evidenced by newly issued promissory notes maturing January 1, 2012. Baymount's subsidiary, BRDC, has been released from the debenture obligation. The Baymount promissory notes remain secured by a second charge on Baymount's 55 acres of excess lands not being used by BRDC for the Quinte Raceway and Slots facility. The promissory notes accrue interest at 12% per annum with 0.625% per month of bonus interest accruing and due upon maturity or retirement of the promissory notes.
"This was a critical first step in refinancing our subsidiary, which is engaged in the development of the new Quinte Raceway and Slots facility in Belleville, Ontario," stated J. Graham Simmonds, president and CEO of Baymount.
He added, "While the past year has been challenging, BRDC is now emerging much stronger and well positioned to execute on the development in Belleville. I would like to thank Macallan, our debenture holders, lenders, suppliers and all stakeholders of our Quinte development for their support in this refinancing effort and we look forward to now being able to move this project forward."
Baymount continues to hold a 100% interest in its 55 acres of excess lands adjacent to the new raceway development in Belleville, Ont. These lands are not part of the transaction with Macallan, and Baymount continues to work with its prospective partners in developing these lands into a family entertainment destination, which plans to feature a new hotel and water park in addition to many other amenities.
(Baymount)