Letter of intent for financing/management of Michigan project; NASD
listing sought
Sungold Gaming International Ltd SUM
Shares issued 15,806,820
Mon 1 Dec 97 News Release
Mr Hans Banziger reports
Sungold and Excelsior Gaming of Willimantic, Connecticut and Premier Gaming
Ventures of Boston, Massachusetts have signed a letter of intent with
regard to the joint development and management of Sungold's proposed
casino/entertainment project in Southeast Michigan.
The letter of intent provides for the formation of a joint venture between
EGI and PGV and the execution of definitive agreements by and between
Sungold, the joint venture partners and the Gun Lake tribe, to be finalized
prior to December 31 1997. Under the provisions of the participation
agreement, Sungold will receive one third of the gross management fees as
agreed upon with the tribe and approved by the National Indian Gaming
Commission.
EGI's chairman and CEO, Bruce Einhorn, has over 20 years of gaming industry
experience gained in senior management positions with the Mirage and the
Golden Nugget Hotel and Casino in Las Vegas, and the Showboat Hotel and
Casino in Atlantic City.
OGV is working with the Lone Star Opportunity Fund, an equity investment
fund headquartered in Dallas, Texas for the financing of the project. The
principals of Lone Star have played significant roles in the acquisition of
mortgage and real estate assets, with a total book value of approximately
$5.7 billion.
Upon the execution of final documents, the joint venture partners will
assume responsibility for:
- The development and operation of the project;
- The financing of the project;
- The financing of all pre-development costs associated with the project
(including Sungold's obligations under its current agreement with the
Gun Lake band); and
- The reimbursement of Sungold for all its monies expended in connection
with the project to date, prior to commencement of casino
construction.
The Sungold warrant holders have expressed a desire to exercise their
warrants, which will provide Sungold with $575,000 in additional working
capital.
The legal action commenced by Jeffrey D. Paquin against Sungold has been
dismissed.
The VSE initially ordered a halt in trading of Sungold's shares under the
provisions of its change of business policy, after concluding that
Sungold's gaming projects have advanced to the point where many of the
essential elements of the COB policy apply.
The VSE then insisted that Sungold retain a sponsoring member firm to
provide the VSE with a reporting letter and to present an independent
report to its pre-listing advisory committee.
The VSE then rejected the formal recommendations submitted by Sungold's
sponsor, Merit Investment Corp, for the re-listing of Sungold's shares.
Merit's endorsement of Sungold is based on and supported by the results of
a thorough analysis of all of Sungold's operations; review of Sungold's
agreements and of the parties to the agreements; an outline of gaming
permit processes and an outline of business risks. Merit has been assisted
in its due diligence process by independent legal firms in Seoul, Korea,
Michigan, Toronto and Vancouver and by the results of a feasibility study
for the proposed Michigan casino project prepared by Marquette of
Minneapolis and an independent assessment of the South Korean gaming market
prepared by KPMG Peat Marwick of Los Angeles.
In addition, the VSE was provided with a detailed business plan and an up
to date filing statement for Sungold. Although the VSE complimented Merit
on the thoroughness and completeness of its review and documentation, the
VSE arbitrarily decided to disregard the facts presented by Merit and issue
a brief defamatory statement contrary to the conclusions of the Merit
report, in complete disregard for Sungold's three thousand shareholders.
Sungold, through its market maker, is currently seeking clearance from the
NASD for the listing and trading of its shares on the OTC bulletin board
under the trading symbol SGGNF. Sungold will delist from the VSE.
(c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com |
