GB Holdings extends exchange for 11% notes

New York, June 30 - GB Holdings Inc. said its Atlantic Coast Entertainment Holdings Inc. subsidiary extended the exchange offer and consent solicitation for GB Property Funding Corp.'s 11% notes due 2005.

The offer will now expire at 12:01 a.m. ET July 15, pushed back from 12:01 a.m. ET July 1.

As of June 29, holders had tendered $65.70 million principal amount of the 11% notes or 59.7% of the amount outstanding.

GB Holdings announced on June 2 that Atlantic Coast Entertainment had begun a consent solicitation and exchange offer to seek the consent of the holders of the 11% notes due 2005 issued by GB Property Funding Corp., a wholly owned subsidiary of the company, to certain indenture changes, and is also seeking to exchange new notes for the outstanding bonds.

GB Holdings, an Atlantic City, N.J., gaming company controlled by financier Carl Icahn, who owns the Sands hotel and casino there, is seeking noteholder consent to amending the indenture governing the 11% notes, the release of the liens on the collateral securing the 11% notes, and approval of the terms of the indenture governing the new 3% notes due 2008 to be issued by Atlantic Holdings and guaranteed by ACE Gaming LLC, a wholly owned subsidiary of Atlantic Holdings.

The new notes would then be exchanged, on a dollar-for-dollar basis, for the 11% notes at a ratio of $1,000 principal amount of 3% notes, plus $100 in cash, together with accrued but unpaid interest for each $1,000 principal amount of 11% notes.

The company said that for purposes of the consent solicitation and exchange offer, a holder tendering the 11% notes for exchange will be deemed to have consented.

Holders may withdraw any 11% notes tendered until the expiration of the exchange offer.

GB also announced that it would hold a special meeting of its stockholders on June 30 to seek approval of the transaction of which the exchange offer is a part.

The completion of the consent solicitation and exchange offer is conditioned upon the approval of the company's stockholders, the consent of the New Jersey Casino Control Commission, the exchange of notes by a majority of the holders of the 11% notes, and the effectiveness of the amendments to the indenture governing the 11% notes and of the indenture governing the 3% notes.

Innisfree M&A Inc. is the solicitation agent (banks and brokers call 212 750-5833; all others call 888 750-5834).

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