nder the terms of the financing, Elixir Gaming would purchase electronic gaming machines from Elixir International in return for Elixir Gaming's issuance of unsecured notes to Elixir International bearing interest at a fixed rate of 8% per annum. The company expects to repay the notes in 24 equal monthly installments after the date of issue. Title of the machines will pass to Elixir Gaming upon its issuance of the Notes.
The first note issued by Elixir Gaming is for us$ 15 million and will be used to extinguish an existing current trade payable to Elixir International in respect to gaming machines previously acquired.
David Reberger, CFO of Elixir Gaming, commented: “Elixir Gaming has achieved rapid success in contracting for and placing electronic gaming machines on a participation model throughout Asia requiring significant capital expenditure on gaming machines. This agreement with the subsidiary of our principal shareholder, Elixir International, provides us with a new avenue of funding to continue to execute on our plan to place gaming machines on a participation basis across Asia. We value the support of Elixir International in granting this trade credit facility.”
While it is the intention of the Elixir Gaming and Elixir International that further notes will be issued, the trade credit facility does not include a commitment on the part of Elixir International and all further borrowings by Elixir Gaming under the trade credit facility are subject to the approval of Elixir International in its sole discretion.
There can be no assurance of any further amount of credit obtainable by Elixir Gaming under the agreement. In the event that any further notes are issued by Elixir Gaming they may be repayable on demand by Elixir International.