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Best of Liz Benston

Gaming Guru

Liz Benston

Cannery Owner Looks to Expand

2 August 2005

The company that owns the Cannery and operates the Rampart casino has found a new equity partner and is raising additional funds to pursue an aggressive growth strategy that could include opening new locals casinos in Las Vegas as well as properties in new and mature casino markets nationwide.

In a deal that requires approval from casino regulators, private Los Angeles investment firm Oaktree Capital Management LLC would own 33 percent of Cannery Casino Resorts LLC and Millennium Gaming Inc. would own the remaining 67 percent.

Millennium Gaming is equally owned by former Circus Circus Enterprises executives Bill Paulos and Bill Wortman.

Cannery Casino Resorts also has hired an investment bank to raise up to $300 million in a new senior secured credit facility. The proceeds will be used to refinance debt and pursue new projects.

"It's all directed at pursuing future growth," Cannery Casino Resorts Chief Financial Officer Tom Lettero said. "Oaktree Capital is a large institution and makes a great partner. They're looking for a return on investment and so are we."

Banc of America Securities, which will raise the $300 million, will create a "better capital structure" from which the company can expand, Lettero said.

Cannery Casino Resorts is eyeing potential casino acquisitions as well as new developments around the country, he said. The company may also explore the possibility of managing tribal casinos, he said.

Oaktree Managing Director Chris Brothers praised the partners' track record and said his company would help them "capitalize on the exciting potential of the Las Vegas locals market as well as gaming in other jurisdictions."

"Based on the company's management and strong operating history, we believe this investment is well placed to achieve long-term growth," Brothers said in a statement.

Oaktree Capital manages more than $28 billion in assets.