Century Casinos announced on Wednesday that it has completed the sale-leaseback of its four Alberta casino properties to subsidiaries of VICI Properties.
The final price was an aggregate of CAD$221.7 million (US$162.4 million) in cash.
The properties in question are Century Casino & Hotel Edmonton, Century Casino St. Albert and Century Mile Racetrack and Casino in Edmonton, and Century Downs Racetrack and Casino (Century Downs) in Calgary.
Century retained CAD$154.5 million after selling expenses, taxes in the U.S. and Canada, and paying off minority owners of Century Downs. The proceeds will be used for growth initiatives and/or paying down debt.
The properties were added to a master lease agreement with subsidiaries of VICI and annual rent there will increase by $17.3 million CAD ($12.7 million). The annual rent escalator for the four properties is capped at 2.5 percent. The lease has a full 15-year initial term, with four five-year renewal options.
“This transaction provides us with the ability to pay down our debt and with greater financial flexibility as we continue to grow,” Erwin Haitzmann and Peter Hoetzinger, co-chief executive officers of Century Casinos, said in a statement.
This was part of several big deals that Century Casinos announced in their recent financial Q2 statement (ended June 30). Second was the company’s acquisition of Nugget Casino Resort in Sparks, Nevada, for US$100 million announced in April. Then the company announced the acquisition of the operations of Rocky Gap Casino Resort in Flintstone, Maryland, completed on July 25, for US$56 million.
Second-quarter highlights for Century Casinos, compared to the three months ended June 30, 2022, included a 23 percent increase in net operating revenue (US$136.8 million). Earnings from operations were $18.6 million, a decrease of 10 percent.
Earlier this year, John Payne, president and chief operating officer of VICI Properties, said the acquisition was part of their confidence in the Canadian gaming market, as well as a desire to expand internationally.