foreclose on Resorts Atlantic City, there's more bad news involving casino/hotel properties in this troubled gaming mecca--specifically Tropicana and Trump. For one, the market value of Tropicana Atlantic City has just dropped sharply, although that could actually pave the way for the current ownership to keep the property.
As reported by GlobeSt.com, Tropicana Entertainment filed a reorganization plan earlier this month in an effort to forestall the local casino/hotel's forced sale, for licensing purposes, by state-appointed conservator Gary Stein. Stein has been actively negotiating with the Baltimore-based Cordish Co. for a sale.
The original offer by Cordish last year of $700 million in stock and cash was later reduced to $575 million all-cash. That has now been reduced further, according to a report by the Associated Press, but no one will say publicly just what the new offer is. A spokesman for Stein confirms the reduction, but offers no specifics.
One group not happy with the new offer is the Trop's creditors, who hold a $1.3-billion mortgage on the property. While not revealing the new offer, Gil Brooks, representing the creditors, tells the Associated Press that the new offer is "too low." Brooks could not be reached for comment.
For its part, Tropicana Entertainment still has its reorganization plan on the table. "The plans will restore the company's financial viability, maximize the opportunity to regain control of casino operations in New Jersey, continue rebuilding infrastructure compromised prior to the start of the restructuring and produce value-enhancing returns for future equity owners," says Trop president and CEO Scott Butera, in a statement.
As far as Trump Entertainment, meanwhile, as reported here, the company missed an interest payment due Dec. 1, 2008 on its 8.5% senior secured notes, and on Dec. 31 got an extension to Jan. 21 to reach an agreement with bondholders. Skipping the payment was permitted under the terms of its lending agreement.
But as the Jan. 21 extension came and went, Trump was able to pick up yet another extension--this until Feb. 4--according to company CEO Mark Juliano, to find a way to restructure its $1.25-billion worth of debt. That new deadline stands, "unless certain events occur," reads a statement issued by the company.
"The company remains in discussions with its lenders and certain note holders regarding a possible restructuring of the company's capital structure," says the statement. "There can be no assurance that any agreement with respect to any restructuring will be reached or, if any agreement is reached, as to the terms thereof."
Failure to reach an agreement would likely mean a third trip to the bankruptcy court for the troubled casino operator. Company officials declined further comment.
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