ATLANTIC CITY, N.J.—Less than a year after opening its doors to the public, Atlantic City's Revel will file for bankruptcy. The resort casino announced that it has reached an agreement with a majority of its lenders to significantly reduce its debt through a debt-for-equity conversion. Revel plans to implement the restructuring through voluntary, prepackaged Chapter 11 cases, and intends to complete the restructuring early this summer.
“[The] announcement is a positive step for Revel,” said Kevin DeSanctis, Revel's chief executive officer. “The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility.”
After undertaking a comprehensive strategic review of restructuring alternatives, the company determined that a prepackaged Chapter 11 would offer the best opportunity for Revel to strengthen its balance sheet and would provide the financial flexibility and resources to invest in the growth of the business.
As part of the restructuring, certain lenders will provide approximately $250 million in debtor-in-possession financing (DIP), approximately $45 million of which constitutes new money commitments and approximately $205 million of which constitutes prepetition debt. No tax payer funds will be used to finance the restructuring.
The restructuring is not expected to impact Revel’s guests, employees, and vendors. Throughout the restructuring, Revel intends to continue normal business operations. All services, dining, scheduled entertainment, programming, and events will move forward without change or interruption, and employees and vendors will be paid in the normal course of business.
“The reduction of debt service expense this agreement facilitates will greatly improve Revel’s cashflow to better support day-to-day operations,” noted Michael Garrity, Revel’s chief investment officer. “This restructuring positions Revel for long-term success by providing the Company with the operational flexibility to invest in the growth of our business.”
The restructuring agreement is subject to satisfaction of certain customary conditions.
Revel’s legal advisor in connection with the restructuring is Kirkland & Ellis LLP. Alvarez & Marsal serves as its restructuring advisor and Moelis & Company serves as its investment banker for the restructuring.
Thursday, February 21, 2013 by Paul Healy
Just love the spin from the guys running Revel. When you spend 2 billion to build something thats alot of money to pay back.
Donald Trump went bankrupt w/ Taj and that was only ONE billion to build. Revel is a mistake and will never make $$.
I went to Revel last summer and there were more people watching me than playing . This gave me my first idea that they got a long road.