Gateway announces expiration of early tender period and receipt of requisite consents in tender offer and consent solicitation for its 8.875% Second Priority Senior Secured Notes due 2017 (CUSIP No. 36760BAB5)

Nov 20, 2013, 08:29 ET from Gateway Casinos & Entertainment Limited

BURNABY, BC, Nov. 20, 2013 /PRNewswire/ - Gateway Casinos & Entertainment Limited ("Gateway" or "Company") announced today, in connection with its previously announced cash tender offer (the "Tender Offer") to purchase any and all of its C$170,000,000 outstanding aggregate principal amount of 8.875% Second Priority Senior Secured Notes due 2017 (the "Notes") and consent solicitation (the "Consent Solicitation" and, together with the Tender Offer, the "Offer"), that as of 5:00 p.m. New York City time, on November 18, 2013, the expiration date had occurred for holders to tender Notes and deliver consents and receive the total consideration pursuant to the Offer, and that it had received, as of 5:00 p.m. New York City time, on November 18, 2013, tenders and consents from holders of Notes in the aggregate principal amount of C$140,927,000, representing approximately 82.9% of the total outstanding principal amount of the Notes.

Tendered Notes could have been withdrawn at any time on or prior to 5:00 p.m., New York City time, on November 18, 2013 (the "Withdrawal Date").  Since the Withdrawal Date has passed, Notes tendered and consents given may not be validly withdrawn or revoked, other than as required by applicable law.  The early settlement date is expected to occur concurrently with the closing of the Refinancing Transactions (as described below).  The tender offer is scheduled to expire at 11:59 p.m., New York City time, on December 3, 2013, unless extended by Gateway.

As a result of obtaining the requisite consents, Gateway intends to promptly execute and deliver a supplemental indenture to the indenture governing the Notes (the "Indenture") containing certain proposed amendments to the Indenture (the "Proposed Amendments").  The Proposed Amendments eliminate most of the restrictive covenants and certain of the events of default contained in the Indenture, release the guarantees of the guarantors under the Indenture and release all of the collateral securing the obligations of the Company and the guarantors under the Notes and related guarantees.  The supplemental indenture will provide that the amendments to the Indenture will only become operative when validly tendered Notes are purchased on the early settlement date pursuant to the Tender Offer.

Gateway's obligation to accept for purchase and pay the consideration for validly tendered Notes remains subject to and conditioned upon: (i) the successful consummation of previously announced Refinancing Transactions on terms and conditions satisfactory to the Company; and (ii) the other customary conditions as set forth in the Offer to Purchase and Consent Solicitation Statement (the "Offer Statement").  The Refinancing Transactions are more fully described in the Offer Statement delivered to holders of Notes. Gateway reserves the right to waive any and all conditions to the Offer.  Gateway intends to redeem the remaining untendered Notes and discharge the indenture governing the Notes upon the closing of the Refinancing Transactions, with such redemption being conditioned upon the closing.

The principal purpose of the Offer is to acquire any and all outstanding Notes and to implement the Proposed Amendments.

Gateway engaged TD Securities Inc. to act as Dealer Manager for the Offer, CST Phoenix Advisors to act as Information Agent for the Offer and Computershare Investor Services Inc. to act as Depositary for the Offer.  Questions regarding the terms of the Tender Offer and Consent Solicitation may be directed to TD Securities Inc. at (416) 982-2243 (collect).  Questions regarding procedures for tendering Notes or requests for documentation may be directed to CST Phoenix Advisors at (800) 833-2158 (toll free) or (201) 806-2222 (banks and brokers) and Computershare Investor Services Inc. at (800) 564-6253 (toll free) or (514) 982-7555 (collect).

This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Offer was made solely pursuant to the Offer to Purchase and Consent Solicitation Statement and related documents.

This press release shall not constitute an offer to sell the new notes as part of the Refinancing Transactions, if any, or the solicitation of an offer to buy the new notes, if any, nor shall there be any sale of new notes in any state or jurisdiction where such offer, solicitation or sale is not permitted. The new notes, if any, will not be qualified for sale to the public under applicable Canadian securities laws and, accordingly, any offer and sale of new notes in Canada will be made on a basis that is exempt from the prospectus requirement of such securities laws. The new notes, if any, will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and state securities laws.

The Gateway portfolio of gaming properties includes Grand Villa Casino Hotel & Conference Centre in Burnaby, Starlight Casino in New Westminster, Cascades Casino Hotel & Convention Centre in Langley, Lake City Casinos in Vernon, Kamloops, Kelowna and Penticton, Baccarat Casino and Palace Casino in Edmonton, and Community Gaming Centres  in Mission, Squamish and Surrey.

Certain statements contained in this press release contain "forward-looking information" pursuant to U.S. and Canadian securities laws ("forward-looking statements"). Forward-looking statements relate to future events or the Company's future performance, including the completion of the Offer and Consent Solicitation and the Refinancing Transactions. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential" and "capable" and similar expressions are intended to identify forward-looking statements.  These forward-looking statements may be affected by the risks and uncertainties in the Company's business.  Important factors potentially affecting performance include but are not limited any failure to satisfy or waive any condition to the Offer and Consent Solicitation, including the financing condition; the ability of the Company to complete the Refinancing Transactions; the highly competitive nature of the gaming industry; economic and competitive conditions in the regions we operate in; changes to the regulatory regime governing our business; our ability to renew the contracts governing our gaming operations; our ability to obtain new casino licenses; wage and/or benefit increases resulting from new collective bargaining agreements, or our inability to reach an agreement with unions; our ability to renew lease agreements for our properties; potential undiscovered liabilities and capital expenditures associated with acquisitions; the impact of liquor laws and associated liquor licenses in British Columbia and Alberta; current global economic conditions; damage or service interruptions to our technology services and electrical power; volatility in our hold percentage (the ratio of net win to total amount wagered); the existence of a fair value impairment in a business segment; our ability to grow through the acquisition, location, relocation and development of new gaming operations; operating risks common to the hotel business; changes to our customer base; players in our casinos committing fraud or cheating; new municipal restrictions or prohibitions; our potential liability arising from litigation related to our business; our ability to obtain adequate insurance to cover all risks incident to our business; our ability to support expanding operations with existing systems; a loss of management and other key personnel; and The Catalyst Capital Group Inc.'s control of the Company.  Any forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release except as required by applicable securities laws.

SOURCE Gateway Casinos & Entertainment Limited