CasinoCityTimes.com

Gurus
News
Newsletter
Search News Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!

Gaming News

 

Argentina Casino Company Purchased

4 June 1997

DALLAS -- Crown Casino Corporation has announced that it has completed the purchase of 49% of the capital stock of Casino Magic Neuquen S.A. ("CMN"), as well as interests in certain other assets and contracts related to CMN, from Casino Magic Corp. (Nasdaq:CMAG) for a purchase price of $7 million. The purchase agreement also provides that the Company and Casino Magic may jointly develop other casino projects in Argentina.

CMN operates casinos in the cities of Neuquen and San Martin de los Andes in the Province of Neuquen, Argentina under an exclusive concession contract that expires in 2007, but can be extended by CMN for five additional years under certain circumstances. In total, the two casinos contain 409 slot machines, 53 table games and have 30,000 square feet of gaming. Revenues were $13.0 million and $15.9 million for the years ended December 31, 1995 and 1996, respectively, and $5.9 million for the first four months of 1997.

The decision to purchase a 49% interest in CMN does not necessarily mark the Company's return to gaming as its core business, but rather is an investment of less than 20% of the Company's capital in a business which, based on recent operating results, is expected to produce an annual pretax return on Crown's investment of approximately 35%. Current trends indicate increases in revenues and profits are expected during 1997. This investment may lead to further opportunities in Argentina as the country continues to privatize its provincial run casinos. Some of the factors that led the Company to seek investments outside the U.S. casino gaming industry in November 1996, such as limited growth prospects and increasing competitive pressures, are not characteristic of the Argentine casino gaming environment.

< Gaming News