As
previously disclosed, on December 19, 2008, Century Casinos, Inc.’s
(“CCI”) subsidiary Century Resorts Limited (“CRL”) entered into an
agreement to sell all of the outstanding shares of Century Casinos Africa
(Pty) Limited (“CCA”), for a gross selling price of ZAR 460 million
(approximately $57 million). CCA owns and operates The
Caledon Hotel, Spa & Casino near Cape Town, South Africa (the “Caledon”), as
well as 60% of, and provides technical casino services to, Century Casino
Newcastle, in Newcastle, South Africa. Net proceeds from the transaction
are expected to be approximately ZAR 352 million (approximately $44 million),
excluding amounts held in retention.
On June
15, 2009, the Sale of Shares Agreement was amended to establish a closing date
for the transaction of June 30, 2009, notwithstanding that regulatory approval
by the Kwa-Zulu Natal Gambling Board (for the sale of Century Casino Newcastle)
has not yet been received. Upon closing of the sale on June 30, 2009, CRL will
receive a net cash amount of approximately ZAR 254 million ($32 million). Once
the approval of the Kwa-Zulu Natal Gambling Board has been obtained, an
additional net cash amount of approximately ZAR 98 million ($12 million) will
become payable to CRL. An additional ZAR 17 million ($2 million) held
in retention may be payable to CRL within sixty days of closing if the net asset value (“NAV”) at
June 30, 2009 is greater than the NAV at December 31, 2008. If the NAV at
December 31, 2008 exceeds the NAV at June 30, 2009 by more than the amount held
in retention, CRL will reimburse Tsogo Sun Gaming an amount equal to the
excess.
Tsogo Sun Gaming will take
over the operations of CCA on July 1, 2009. If approval by the Kwa-Zulu
Natal Gambling Board is not obtained by December 31, 2009, CRL will repurchase
it’s 60% interest in the Century Casino Newcastle for ZAR 1.00 and the Purchase
Price shall be deemed to have been reduced by approximately ZAR
98 million ($12 million).
This
summary of the terms of the amendment is qualified in its entirety by
the text of the Amendment to the Sale of Shares Agreement, a copy of which is
attached to this Form 8-K as exhibit 2.2 and is incorporated herein by
reference.