Formerly Hotel San Remo Casino and Resort, Hooters Casino Hotel is located one-half block from the intersection of Tropicana Avenue and Las Vegas Boulevard. The property, which has 696 hotel rooms, has been unable to maintain an average hotel occupancy anywhere near the 95% that is the norm for Las Vegas hotels since it opened for business this time last year.
NTH Advisory Group, LLC is a Santa Monica, CA-based casino and hotel development and advisory firm led by Richard Bosworth. 155 East Tropicana is a partnership of Florida Hooters LLC and EW Common LLC. EW Common is owned 90% by Eastern & Western and 10% by Michael J. Hessling, formerly the executive vice president and chief executive officer of Hôtel San Rémo, and currently the president of 155 East Tropicana.
155 East Tropicana agreed to acquire the real property and other assets of Hotel San Remo in 2004 for approximately $72.5 million. The acquisition was funded in part through a term loan totaling $48.5 million that was used to extinguish Hôtel San Rémo's then existing indebtedness of $43.7 million, to pay the former owner of Hôtel San Rémo $1.3 million and for the issuance to EW Common LLC of a 33.3% membership interest with priority return valued at $20 million.
In March 2005, it completed the issuance of $130 million in principal amount 8¾% Senior Secured Notes due 2012 and, in August 2005, exchanged all of the old notes for new notes. Proceeds from the old notes offering were used principally to renovate the Hôtel San Rémo into the Hooters Casino Hotel.
In October 2005, it secured its gaming and liquor licenses and on Nov. 1, 2005, assumed the operations of the hotel and casino and started renovating the property. The property opened as Hooter's Hotel Casino in February 2006.
When the sale to NTH Advisory Group was announced in January, Neil Kiefer, the CEO of 155 East Tropicana LLC, said the offer was unsolicited and "will provide an attractive return to the company's owners, yet allow the owners who are not interested in the transaction to maintain their ownership interests, subject to certain limitations."
The revised LOI calls for NTH to purchase all of the outstanding membership interests for a purchase price of $95 million in cash, the payment of certain accrued royalties, and 5% of certain future ownership distributions. NTH also assumes responsibility for any repurchases, and related costs, of the $130 million in principal amount of 8 ¾% Senior Secured Notes due 2012.
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