Mexican deal struck

Monday, July 23, 2001 | 11:17 a.m.

A pair of small Las Vegas gaming companies announced they finalized an agreement to develop and operate "entertainment centers" in Mexico.

The first center operated under the agreement between Viva Gaming & Resorts Inc. and Phoenix Leisure Corp., located in one of Mexico City's busiest malls, will be completed in late August. The center will contain 460 token-operated lottery machines.

Viva holds rights to distribute and market scratch lottery tickets in Mexico through such centers. Under the agreement announced Friday, Phoenix will provide Viva with the financing necessary to develop and operate such centers. To date, Phoenix said it has provided Viva $1.6 million in financing.

Phoenix said it will commit an additional $2 million to Viva: $500,000 for the purchase of 2.5 million shares of stock, and a $1.5 million loan due in one year. Phoenix will also contribute gaming machines to the centers in exchange for 1 million shares of Viva stock and a $500,000 promissory note that can be converted into 500,000 shares of Viva stock. The agreement also allows Phoenix to buy another 1 million shares of Viva stock for $1,000. All shares issued under the agreement are new, restricted shares.

Viva also announced it has agreed to retire some of its debt in exchange for restricted shares of stock, but didn't specify how many shares will be issued, how much debt will be retired, or who will hold the new shares.

Following the transactions, Viva will have 28 million outstanding shares, up from 8.7 million.