US casino giant MGM Resorts International announced Wednesday it has closed on the sale of the operations of Gold Strike Tunica to CNE Gaming Holdings, a subsidiary of Cherokee Nation Businesses, for $450 million in cash.
Bill Hornbuckle, CEO & President of MGM, commented: “Gold Strike is an iconic property in Mississippi, and the employees there represent southern hospitality at its finest. I wish Gold Strike well, and firmly believe a bright future is ahead for this property.”
Jonathan Halkyard, CFO & Treasurer of MGM Resorts International, added: “We plan to use the proceeds from this transaction to further fortify our balance sheet, deploy capital to growth opportunities, and return capital to shareholders.”
For the year ended December 31, 2022, Gold Strike reported net income of $47 million and EBITDAR of $98 million. At the closing of the transaction, MGM Resorts’ master lease with VICI Properties, which currently includes the Gold Strike property, will be amended to reduce the annual rent by $40 million to account for the company’s sale of the operations of Gold Strike.
The Company expects net cash proceeds after taxes and estimated fees to be approximately $350 million. Weil, Gotshal & Manges LLP served as legal counsel to MGM Resorts.
VICI has also now entered into a triple-net lease agreement with CNB with respect to the real property associated with Gold Strike. Initial total annual rent under the lease is $40 million and the lease has an initial term of 25 years, with three 10-year tenant renewal options. Rent under the lease will escalate annually by 2.0%
Bill Hornbuckle.
Earlier this month, MGM reported financial results for the fourth quarter and the full year of 2022. Net revenues for Q4 increased by 18% to $3.6 billion, while net revenues for the whole year amounted to $13.1 billion, an increase of 36% over the full year 2021. Officials said that a steady return of convention business, domestic leisure travel and encouraging results during the Lunar New Year at MGM China are set to drive “strong momentum” into the new year.
The Las Vegas-based giant reported a net income of $284 million, a loss of $1.53 per share, on revenue of $3.6 billion for Q4. In the same quarter one year ago, the company had a net income of $131 million, $2.77 a share, on revenue of $3.1 billion. Officials said income was affected by a $2 million loss in operating income attributed to the gaming subconcession process for Macau property MGM Grand Paradise, which was awarded another 10-year contract to operate in the gambling hub.
Original article: https://www.yogonet.com/international/news/2023/02/16/66137-mgm-completes-sale-of-mississippi-39s-gold-strike-tunica-operations-to-cherokee-nation
