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Gaming Guru

Richard N. Velotta

Aladdin Bosses Pleased Despite $4.1 Million Loss

27 January 2004

The Las Vegas Strip's Aladdin hotel-casino, in the midst of a U.S. Bankruptcy Court-approved sale, had a loss of $4.1 million in December, documents filed with the court said.

That compares with a loss of $12.8 million in December 2002, most of which was attributed to an $8.7 million interest payment the company made that month.

A spokeswoman for the company said Aladdin officials were happy with December cash flow at the resort, which was $1.7 million compared with $1.3 million in the same month a year ago.

Tyri Squyres said the 2,567-room resort also had its best December ever by hotel occupancy with 94.4 percent of the room nights filled. The hotel also had an average daily room rate of $91.95 in December, a 3 percent increase over the December 2002 rate.

Squyres said the Aladdin completed 2003 with cash flow of $54.7 million compared with $38.1 million for 2002, and the occupancy rate for 2003 was 98 percent.

"The end of the year was very strong for us," Squyres said following the filing of a statement of operations with the Bankruptcy Court.

The monthly operating report said the Aladdin's holding company had $20 million in revenue compared with $18.3 million in December 2002.

The company reported expenses of $24.1 million, which includes a monthly payroll of $6.5 million. In December 2002, the company listed expenses at $29.7 million, which included the $8.7 million interest payment. By comparison, the company paid only $329,786 in interest last month.

In addition to those general expenses, the Aladdin paid $67,751 in bankruptcy reorganization costs for the month, compared with $1.4 million paid in December 2002.

Since the company first petitioned for bankruptcy protection in September 2001, the company has lost $119.8 million, which includes bankruptcy reorganization expenses of $48.2 million, according to the filing.

The hotel is in the process of being sold for $635 million to a group headed by Planet Hollywood International Inc. Chairman and Chief Executive Robert Earl and partners Starwood Hotels & Resorts Worldwide Inc., and financier Bay Harbour Management LC. Although Planet Hollywood's company, which operates a chain of motion picture-themed restaurants, is not a part of the deal, Earl has negotiated to use the Planet Hollywood name on the Strip property.

Officials with the state Gaming Control Board confirmed Monday that Earl's group is seeking licensing and that proposed officers and managers are undergoing the agency's routine suitability investigation. Board officials said they did not know how long it would take to complete the investigation and that the length of each investigation varies.

When Earl and his partners completed negotiations for the sale last summer, they said the deal would not close until licensing was completed and they expected that to occur by June or July.