Irell & Manella Represents Pinnacle in Financing for Vietnam Resort

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August 2012

Irell & Manella LLP represented Pinnacle Entertainment, Inc. in connection with an additional $15.6M investment in Asian Coast Development (Canada) Ltd. (ACDL), an international development and real estate company currently working on Vietnam's first large-scale integrated resort on the Ho Tram Strip. The financing transaction, which closed Aug. 29, follows on Pinnacle Entertainment’s previous investment of $95M in ACDL, bringing its total investment to approximately $110M. The Irell team was led by Partner Ashok Mukhey with Partner Emeritus Ede Ibekwe assisting on the deal.

As a result of its $95M investment in August 2011, Las Vegas-based Pinnacle Entertainment acquired a 26 percent ownership stake in ACDL. The recently concluded Subscription Agreement provides that Pinnacle Entertainment, through the same wholly-owned subsidiary that made the original investment, will invest an additional $15.6M in convertible preferred stock of ACDL, subject to the satisfaction of certain conditions, as part of a previously disclosed total capital raise by ACDL of $60 million. The transaction will be funded in two stages, the first of which, comprising 85 percent of the total capital raise, closed and funded on Aug. 29. The remaining 15 percent is scheduled to close by the end of September 2012. The transaction also involved the signing of an amended and restated shareholders agreement between ACDL, the Pinnacle subsidiary, and Harbinger entities.  The amended and restated shareholders agreement contains arrangements among the parties thereto with respect to the business and affairs of ACDL and the ownership of securities of ACDL, including, without limitation, voting rights, board representation, financial information rights, transfer restrictions and other transfer provisions, tag-along rights, drag-along rights, rights of first negotiation upon a disposition of ACDL securities, preemptive rights, and majority and minority shareholder consent rights over certain corporate actions.

The Ho Tram Strip destination resorts project is located approximately 80 miles southeast of Ho Chi Minh City, Vietnam's largest city, attracting the majority of Vietnam's 5 million tourists each year. The $60 million capital raise, along with ACDL's previously secured financing commitments and a to-be obtained working capital facility, is expected to provide sufficient capital for the opening of Phase A-1 of the MGM Grand Ho Tram, which is planned for the first quarter of 2013. The second integrated resort of the Ho Tram Strip, for which Pinnacle has secured a management agreement, will be jointly developed by Pinnacle and ACDL and owned by ACDL. Pinnacle and ACDL expect the second integrated resort, branded as a distinct and premium resort, will be similar in project scope to the MGM Grand Ho Tram resort currently under construction.