$1.25 Million Investment Loan Helps as Gateway Casinos Refinances Corporate Debt, Increases Liquidity & Repays Canadian LEEFF Loan (Images from gatewaycasinos.com)
Gateway Casinos & Entertainment Limited, one of Canada’s largest gaming and entertainment companies, recently revealed that it has secured a $1.25 billion loan that has enabled the firm to refinance its corporate debt and strengthen its capital position.
As part of the refinancing, Gateway has cleared the outstanding CAD 200 million owed to the Canadian government LEEFF loan facility.
The Fortress Investment Group is the lead investor in a transaction worth US$1.25 billion that has allowed Gateway to refinance its capital structure and bring much-needed funds to the balance sheet. The transaction was issued as a $1.25 billion Senior Secured Term Loan secured over the next 6 years.
Gateway, which owns and operate 28 gaming properties across British Columbia, Ontario and Edmonton, Alberta, suffered temporary closures and other lockdown restrictions due to the COVID-19 pandemic. The company sought a loan from the LEEFF program in September 2020 and through this investment, it has now been repaid. The LEEFF (Large Employer Emergency Financing Facility Factsheet) program was set up by the Canadian government to support large companies that faced struggles throughout the pandemic.
The land-based gambling industry as a whole took a beating throughout the pandemic. For players, this was not a big deal as they could ply their trade at the best Canadian online casinos. However, land-based companies such as Gateway that employs over 6,500 people, faced huge uncertainties. The LEEFF loan allowed the company to preserve liquidity, support employees, and generally stem the tide before being able to resume full operation.
Refinancing Loan Allows Gateway to Press Ahead with Development Projects and Future Growth Initiatives
Fortunately, since the reopening of establishments, Gateway has reported higher operating margins and adjusted EBITDA than expected and now believe it is in a strong position to once again push the firm in the right direction. $1 billion of the investment loan issued by the Fortress Investment Group will add to the cash flow of the company. This will allow Gateway to tackle future growth initiatives and restart several development projects.
One such development is the construction of its Ontario casino Cascades. Under construction in the North Bay area, the casino was meant to open in mid-2020. However, construction was called to halt due to the pandemic. The firm continued construction on the site earlier this year and hopes to have the establishment up and running as soon as possible.
