Interstate General Co. Limited Partnership yesterday completed a planned spin-off of its thoroughbred horse racing interests, part of a push by the St. Charles-based real estate developer to boost the market value of its assets.
Equus Gaming Co. L.P.'s units -- shares of a publicly held partnership -- closed at $4.50 in trading on the Nasdaq market, off $1 from its opening price. The new company holds a majority interest in the partnership that controls the El Comandante race track in San Juan, Puerto Rico, and a related off-track betting system.
In addition to its Puerto Rico interests, Equus also will operate a new $40 million, government-owned track set to open in April in the Dominican Republic.
IGC provided shareholders with one unit of Equus stock for every two shares of outstanding IGC stock.
IGC decided to spin off its racing interests in the belief that its various subsidiaries are separately more valuable than IGC's stock price indicates. IGC shares, which were trading in the $7 range before the spin-off, closed at $4.875 yesterday.
IGC acquired El Comandante and related assets in 1989 for $68 million and has increased the amount wagered to roughly $275 million in 1994, up from $139.5 million in 1989, according to a Oppenheimer & Co. Inc. report.
In 1996, track wagering is expected to rise to $312 million, generating earnings before noncash charges of $18.6 million, the report noted.
The track was recently appraised at $124 million, according to a prospectus related to the spinoff. Its total indebtedness is $69.2 million.
For the nine months that ended Sept. 30, Equus reported net income of $3.6 million on revenues of $11.7 million, reversing a 1993 year-end loss of $4.5 million.