Note sold to Kien Huat Realty III; proceeds pay off 5.5% convertibles
By Devika Patel
Knoxville, Tenn., Nov. 19 - Empire Resorts, Inc. sold a convertible promissory note to Kien Huat Realty III Ltd. on Nov. 17, according to an 8-K filed Friday with the Securities and Exchange Commission.
The $35 million 5% note is due June 30, 2011, but its maturity may be extended to Sept. 20, 2011. It is initially convertible into common shares at about $0.8837 per share, or 1,132 common shares per $1,000 of notes, a 13.36% discount to the Nov. 16 closing share price of $1.02.
Proceeds of the sale, along with available cash, will be used to repurchase the company's 5.5% convertible senior existing notes due 2014 by Nov. 22. These notes will be purchased at par plus interest, along with an additional $975,000.
"The restructuring of our indebtedness is an important milestone for Empire Resorts," chief executive officer Joseph D'Amato said in a press release. "As a result of this transaction, the company has over $7 million in working capital."
"We look forward to focusing on the completion of our rights offering which will further enhance the company's financial position. We are optimistic that resolving these financing matters will allow Empire Resorts to focus on our ongoing efforts to enhance shareholder value."
Empire Resorts is a Monticello, N.Y., operator of the Monticello Raceway.
| Issuer: | Empire Resorts, Inc.
|
| Issue: | Convertible promissory note
|
| Amount: | $35 million
|
| Maturity: | June 30, 2011
|
| Coupon: | 5%
|
| Price: | Par
|
| Yield: | 5%
|
| Conversion price: | $0.8837 (approximate)
|
| Conversion ratio: | 1,132 common shares per $1,000 in notes
|
| Conversion discount: | 13.36%
|
| Warrants: | No
|
| Investor: | Kien Huat Realty III Ltd.
|
| Settlement date: | Nov. 17
|
| Stock symbol: | Nasdaq: NYNY
|
| Stock price: | $1.20 at close Nov. 17
|
| Market capitalization: | $88.93 million
|
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