 Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter! Related Links
|
Gaming News
Aladdin to Make Payment on Bank Debt1 May 2001LAS VEGAS, Nevada –– As reported by the Las Vegas Review-Journal: “Aladdin Gaming LLC is expected today to make an $11.3 million interest payment on bank debt of $458.7 million despite a recent auditors' warning that questioned whether the company will meet its scheduled payments this year ”The operator of the 8-month-old Aladdin megaresort has adequate cash flow and investor support to pay the money to a group of lenders headed by the Bank of Nova Scotia, a source said Monday. ”…Aladdin Gaming auditors questioned in a 10-K annual report filed in early April whether the company will exist a year from now because of anticipated troubles in making scheduled 2001 debt payments totaling $65.7 million. ”The wording of the document raised doubts as to whether the company will continue as a "going concern," but such wording is not necessarily a precursor of a pending Chapter 11 bankruptcy filing. ”…It is a sign that the Aladdin faces major financial challenges, but [Aladdin spokesman Lynn Holt] said Monday a bankruptcy filing is not on the horizon. ”…The Aladdin, which opened Aug. 18, operated for 136 days and generated gross revenue of $137 million with a net loss of $76.2 million, according to the 10-K filing for the year ended Dec. 31. ”Cash flow for the 4 1/2-month period was about $11 million. That would place it well below the $100 million to $120 million of yearly cash flow projected by some Wall Street financial analysts at the time of the megaresort's opening. ”…Aladdin Gaming will rely on financial contributions from its majority owners, the Sommer Family Trust and London Clubs International, according to the early April filing with the federal Securities and Exchange Commission. But there are no assurances such contributions will be made to cover all of the debt, according to the 10-K. ”…Aladdin Gaming Chairman Richard Goeglein denied that the property is for sale, although a source said the Bank of Nova Scotia is apparently shopping the 40 percent interest of London Clubs International without Goeglein's knowledge. The Sommer Family Trust owns 57 percent of Aladdin Gaming, with a Goeglein subsidiary holding the remaining 3 percent…” |