Four Winds Casino Resort Outside New Buffalo, Michigan
|MINNEAPOLIS -- June 23, 2006 -- Lakes Entertainment, Inc. (Nasdaq:LACO)
announced today that on June 22, 2006 an affiliate of the Pokagon Band
of Potawatomi Indians (Pokagon Band) closed on a $305 million senior note
financing in addition to a $75 million commitment for furniture, fixtures
and equipment to fund the Four Winds Casino project in New Buffalo Township,
Michigan. In addition, Lakes simultaneously closed on a previously announced
$105 million credit agreement through a wholly-owned subsidiary with Bank
of America, N.A., as Administrative Agent and the Banc of America Securities,
LLC (BAS) serving as sole lead arranger and sole book manager (BofA credit
Lakes, through a wholly-owned subsidiary, has management and development agreements with an affiliate of the Pokagon Band to develop and manage the Four Winds Casino. The Four Winds Casino will be an approximately 275,000 square foot full-service facility and is expected to include a 130,000 square foot gaming floor featuring 3,000 class III slot machines, 90 table games and a 20-table poker room; a 164-room hotel; six high-quality restaurants; three casino bars; a childcare facility and arcade; retail space; enclosed parking and other casino amenities. The Four Winds Casino will be the only land-based casino in the northern Indiana/western Michigan market.
Lyle Berman, Lakes' Chairman of the Board and Chief Executive Officer, stated, "We are very pleased for the Pokagon Band and congratulate them on securing the funds to develop the Four Winds Casino. We look forward to working with them to open the Four Winds Casino in the third quarter of 2007 and to help make it a tremendous success."
Approximately $25 million of the proceeds from the BofA credit agreement
were used to repay in full Lakes' February 16, 2006 financing facility
with an affiliate of Prentice Capital Management, LP (Prentice), and an
additional approximately $22.5 million were used to fund Lakes' remaining
obligation to the Pokagon Band. The remaining proceeds will be used for,
among other things, funding the interest reserve under the BofA credit
agreement, for Lakes' other casino development projects and for working
capital purposes. All funds drawn under the BofA credit agreement bear
interest at the rate of LIBOR plus 6.25% per annum (subject to change pursuant
to the terms of the BofA credit agreement), are due and payable on the
fourth anniversary of the closing and are secured by substantially all
of the material assets of Lakes.
Tim Cope, President and CFO of Lakes, stated, "We have started construction of the Four Winds Casino and with the funds provided by the Lakes' credit agreement we will continue to move forward with our various other casino development projects. We will explore additional financing alternatives to fund future operations and development costs as needed. While we are allowed to sell up to three million shares of WPT Enterprises, Inc. (Nasdaq "WPTE") under the BofA credit agreement, we are no longer actively pursuing a sale of such shares."
As a result of repaying the Prentice financing facility in full without any additional draws, 1.25 million warrants issued to Prentice will remain outstanding and exercisable while approximately 3.21 million warrants issued to Prentice will lapse and not become exercisable.
About Lakes Entertainment
Lakes Entertainment, Inc. currently has development and management agreements with five separate Tribes for new casino operations in Michigan, California, and Oklahoma, a total of eight separate casino sites. In addition, Lakes has announced plans to develop a company owned casino resort project in Vicksburg, Mississippi. The Company also owns approximately 62% of WPT Enterprises, Inc. (Nasdaq "WPTE"), a separate publicly held media and entertainment company principally engaged in the development, production and marketing of gaming themed televised programming including the World Poker Tour television series, the licensing and sale of branded products and the sale of corporate sponsorships.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Lakes Entertainment, Inc.) contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities as well as other capital spending, financing sources and the effects of regulation (including gaming and tax regulation) and competition.
Lakes Entertainment, Inc.
Pokagon Band of Potawatomi Indians
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