DATE: Wednesday, March 19, 1997             TAG: 9703190488

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY TOM SHEAN, STAFF WRITER 

                                            LENGTH:   54 lines

COLONIAL DOWNS TO COLLECT ABOUT $37 MILLION FROM STOCK OFFERING

In its first day of trading, the stock of Colonial Downs Holdings Inc. slipped 12 cents to $9.38 Tuesday after an initial public offering of 4.25 million shares.

Priced at $9.50 each, the Colonial Downs shares came to the market at the low end of a $9-to-$11 range predicted by underwriter Friedman, Billings, Ramsey & Co., an Arlington investment banking firm.

Colonial Downs, the only company licensed in Virginia to operate a horse-racing track and conduct pari-mutuel betting, stands to collect about $37 million from the stock offering.

The company, which is building a horse track in New Kent County near Williamsburg, said it plans to use the proceeds for construction of off-track betting parlors, repayment of debt and other purposes.

Colonial Downs operates two off-track parlors in Chesapeake and Richmond and received licenses in February to operate athird parlor in Hampton. Scheduled to open this summer, the Hampton facility will be built near the intersection of Mercury Boulevard and Interstate 64, said Michael Salmon, controller of the Providence Forge-based company. Construction of the 13,500-square-foot building is due to begin shortly, he said.

Colonial Downs also has applied to the Virginia Racing Commission to build a fourth off-track betting parlor near Interstate 85 in Brunswick County. That location - west of Emporia and close to the state line - could attract bettors from North Carolina.

Salmon said the company is waiting for local permits before beginning work on the $956,000 facility.

After Tuesday's stock offering, Colonial Downs' class A shares began trading in the Nasdaq National Market System under the ticker symbol CDWN. The offering brought the total number of Colonial Downs' class A shares outstanding to 5 million.

The company has a separate class of ``B'' shares held by Colonial Downs' founders. The A stock has one vote per share, while the B stock has five votes per share and can be converted to class A shares.

In filings with the Securities and Exchange Commission, Colonial Downs reported almost $1 million of cumulative losses for the past three years, including a net loss of $645,415 for 1996.

The company said it will continue to lose money until its racetrack and four betting parlors are operating at projected levels. Salmon, the company's controller, said the racetrack probably will begin operating Sept. 1.

Colonial Downs has said its racing season will include 30 days of thoroughbred racing and as many as 50 days of harness racing.

In its filings with the SEC, the company acknowledged that its stock has several risks for investors, including a nationwide decline in attendance and betting at horse-racing tracks. Colonial Downs said its prospects will depend on an ability to generate revenue by opening additional off-track betting parlors. KEYWORDS: COLONIAL DOWNS OFF-TRACK BETTING

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