Business
Gamehost Income Fund - Reports 2009 second quarter financial results
RED DEER, AB, Aug. 14 /CNW/ - Gamehost Income Fund (the "Fund") (TSX: GH.UN) Management and Trust...
About this update from Gamehost Inc.
[{"type":"text","content":"\n\n\n\nRED DEER, AB, Aug. 14 /CNW/ - Gamehost Income Fund (the "Fund") (TSX:\nGH.UN) Management and Trustees of Gamehost Income Fund (the "Fund") present\nresults for the three months ended June 30, 2009 (the "Quarter").\n\n\nThe Stampede Joint Venture has placed itself into voluntary receivership.\nThe decision to do so came only after negotiations to secure sufficient relief\nfrom the lender and landlord to the Stampede Joint Venture failed. Subsequent\nto the failure of these negotiations, the Stampede Joint Venture received a\ndemand notice from the lender for full repayment of all outstanding loans.\nAlternate financing options were not available and near and longer term\nprojected cash flow for the Stampede Joint Venture is not encouraging.\nVoluntary receivership was seen as the best alternative for minimizing further\nlosses to the joint venturers. New start ups have their challenges in any\neconomy, but the Stampede Joint Venture had the misfortune of opening into the\nteeth of the recession. We are disappointed in the turn of events, but agree\nthe decision will eliminate the drag the asset would likely continue to be on\nFund earnings. An orderly transition of the assets and operation to the\nreceiver will take place on August 17, 2009.\n\n\nA write down of the Stampede Joint Venture asset was recorded by the\nStampede Joint Venture during the Quarter and the Fund recorded a\nproportionate share of this write down through consolidation as a non-cash\ncharge to earnings of $5.6 million.\n\n\nThe Fund has also provided a $5.0 million unsecured limited liability\nguarantee to the lender to the Stampede Joint Venture to indemnify it in the\nevent the Stampede Joint Venture does not perform its contractual obligations.\nNegotiations are ongoing with the lender. The likelihood and amount of any\npayment under this guarantee can not be reliably estimated at this time.\nTraditional bank debt is being arranged in the event all or part of this\nguarantee becomes due\n\n\nResults for the Quarter indicate decreased economic activity in the\nmarketplace on most fronts, not the least of which was the Alberta\nGovernment's decision to implement a tax on both cigarettes and liquor at the\nbeginning of April. Quarterly revenues totaled $13.0 million down 3.8% from\nthe $13.5 million posted in Q2 2008, an...