Clairvest Completes Sale of Gateway Casinos Investments
November 20, 2007 - Clairvest Group Inc. today announced the realization on its casino interests in western Canada.
Accordingly, Clairvest has disposed of its interests in Gateway Casinos Inc. (GCI) and Gateway Casinos Income Fund (the Fund), both based in Burnaby, B.C.
Clairvest today received proceeds of $117 million, which is net of taxes paid at Gateway but subject to taxation at the Clairvest level. As a result, Clairvest’s book value on an after-tax basis will increase by $0.27 per share from the September 30, 2007 book value.
Terms of the agreement call for Clairvest to be paid up to an additional $5.5 million over the next 12 months. Should the additional proceeds be received in full, this amount represents an additional contribution of $0.30 per share to book value on an after-tax basis.
Clairvest initially invested $24 million in Gateway Casinos. Over the eight-year life of the investment, it has to date generated pre-tax proceeds of approximately 8.7 times Clairvest’s initial investment, for a pre-tax internal rate of return of 50%.