|By Donald Wittkowski, The Press of
Atlantic City, Pleasantville, N.J.McClatchy-Tribune Regional News
April 06, 2011--ATLANTIC CITY -- The New Jersey Casino Control Commission is set today to approve a new ownership structure that puts another New York billionaire at the head of the Trump Entertainment Resorts Inc. gaming empire.
His name is Marc Lasry.
Lasry, chairman of the hedge fund Avenue Capital Group, led a bondholder takeover of the Trump casinos last year when they were in bankruptcy, but he has been awaiting final approval from New Jersey regulators for the ownership structure.
The new casino ownership group will include Lasry's sister, Sonia Gardner, who co-founded Avenue Capital. Lasry will serve as Trump Entertainment's chairman.
Lasry, who declined to comment Tuesday in advance of the commission's vote, has already been shaking up the Trump organization. He replaced the management team late last year and agreed to sell Trump Marina Hotel Casino in February for $38 million.
Donald Trump, meanwhile, will own only a minority stake in the reorganized company. Lasry and his fellow bondholders agreed to give Trump as much as 10 percent ownership in exchange for the continued use of his name on the casinos.
One gaming analyst said the ownership change will be imperceptible to the public as long as the Trump name appears on the Atlantic City skyline. Trump and his celebrity daughter, Ivanka, are allowing the new owners to use their name and image to promote the casinos.
"As far as the public is concerned, so long as the Trump name remains on the building, they will be Trump casinos," said Joseph Weinert, senior vice president of the Linwood-based casino consulting firm Spectrum Gaming Group.
The Trump casinos have had a tumultuous history, including two separate bouts in Chapter 11 bankruptcy since 2005. Weinert stressed it will be key for the new ownership group to stabilize the company's operations and management.
"The company has been through a few iterations and management teams over the years. I think it would serve the properties, the employees and the customers to have stable management," Weinert said. "I think the employees have one eye open, wondering what's going to happen next."
Bob Griffin, a veteran casino executive, was brought in by the Lasry group as Trump Entertainment's new chief executive officer. Since taking over in November, Griffin has focused on cutting costs, trimming the work force and restructuring operations.
"We like Bob Griffin," Weinert said. "We think he's a realist. He's not in denial about the long-term challenges confronting the city. Early indications are that they have the right man for the job."
Starting May 25, Griffin will have one fewer Trump casino to oversee, though. Landry's Inc., a gaming, restaurant and entertainment conglomerate, is scheduled to take over then as the new owner of Trump Marina and will rebrand it as a Golden Nugget casino.
Landry's owns the Golden Nugget casino hotels in Las Vegas and Laughlin, Nev. Trump Marina's purchase and the renovations to transform it into a Golden Nugget will be financed through a $100 million loan and a $10 million credit facility, Wall Street ratings company Standard & Poor's said Tuesday.
S&P has assigned a "B" corporate credit rating to the newly formed Atlantic City Golden Nugget LLC, including a "stable" outlook. The ratings company expressed concerns that Golden Nugget will depend on cash flow from a single casino in the slumping Atlantic City market to pay off the new debt.
"The preliminary 'B' corporate credit rating reflects Golden Nugget's reliance on a single property for cash flow generation, the highly competitive dynamics in the region and our expectation that the U.S. economy will only gradually improve over the next several quarters," S&P credit analyst Melissa Long said in a statement.
Trump Marina has been the weakest performer of the Trump casinos. The Marina suffered a $4.9 million operating loss in the fourth quarter of 2010 and was $8.3 million in the hole for the entire year, the New Jersey Division of Gaming Enforcement reported Monday in a year-end earnings statement for the Atlantic City casinos.
Proceeds from Trump Marina's sale will allow Trump Entertainment to pay down the company's $344 million debt. Free of the Marina, Trump Entertainment will be able to concentrate on Trump Plaza Hotel and Casino and Trump Taj Mahal Casino Resort.
Robert Symington, a member of the Trump Entertainment board of directors, is scheduled to testify during today's Casino Control Commission meeting. The commissioners are expected to ask him for details about the future of Trump Plaza and the Taj Mahal under the company's new ownership structure.
The flagship Taj Mahal has been upgraded in recent years, including the addition of a nearly 800-room hotel tower in 2008. The Taj stumbled to a nearly $3 million operating loss in the fourth quarter. For all of 2010, the Taj had a $50.7 million operating profit, down 40 percent from 2009.
Trump Plaza sank to an operating loss of $5.5 million in the fourth quarter and ended the year nearly $2.4 million in the red. Trump Entertainment has talked of possibly bringing in a joint venture partner to redevelop the aging Plaza, but there is also speculation the casino may be sold.
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