Colonial Downs Holdings, Inc. Announces Management Contract
NEW KENT, Va.--(BUSINESS WIRE)--July 18, 2000--Colonial Downs Holdings, Inc. (NASDAQ: SCM: CDWN) ("the Company") which, through its subsidiaries, holds the only licenses to own and operate a pari-mutuel horseracing course and satellite racing centers in Virginia, announced today that it has reached an agreement in principle with JALOU II Inc., an affiliate of Mr. Jeffrey P. Jacobs, the Chairman and CEO of the Company, to manage video poker truckstop assets in Louisiana on its behalf.
JALOU has entered into option agreements to acquire two existing truckstops in Louisiana as well as several that are under development. Each truckstop provides fuel, food and beverage services and has 50 video poker machines. Under the proposed management contract, the Company will manage the truckstops for a fee based on total revenue and earnings before interest, taxes and amortization (EBITDA). It is anticipated that JALOU will close the truckstop acquisitions late in the third quarter of 2000, subject to licensing in Louisiana and financing. The truckstops will be managed by Colonial Holdings Entertainment, Inc., a newly formed wholly owned subsidiary of the Company, which will seek to develop management fee income in a variety of industries. The shareholders of the Company have been asked to change the name of the Company at the annual shareholders meeting on August 2, 2000 to Colonial Holdings, Inc. to better reflect the Company's expanded activities.
Ian M. Stewart, President and CFO of Colonial Downs stated, "The agreement in principle with JALOU represents the first step in diversifying the Company's operations. This contract should improve the Company's cash flow and long term financial stability. It is exciting to announce this growth initiative on the eve of our thoroughbred meet, which is scheduled to open September 4th, Labor Day. We believe that the 2000 thoroughbred meet will see the largest number of horses stabling on the grounds to date. The large number of horses on the grounds combined with our famous turf course should result in even larger fields than last year when we averaged 9 horses per race on our turf course. We believe that our efforts both within and outside the context of pari-mutuel wagering in Virginia will help grow shareholder value."
Colonial Downs Holdings, Inc. is a Virginia corporation organized in November 1996 to pursue opportunities for pari-mutuel horse race wagering in Virginia. The Company through its subsidiaries holds the only unlimited licenses to own and operate a pari-mutuel horseracing course and satellite wagering facilities/racing centers in Virginia. Colonial Downs Holdings, Inc. became a publicly held company in March 1997 and trades on the NASDAQ Small Cap System under the symbol CDWN. |
