|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
Nov. 28, 2012--For the second time in three months, Atlantic City's ailing Revel is going to its lenders for more money to stay afloat.
Wall Street gaming analysts say the casino is at the brink of insolvency, particularly with the fall-off in business that has followed Hurricane Sandy.
Last week, Revel AC Inc. entered into discussions "with a majority of its lending group to provide additional capital for liquidity and to fund certain gaming projects at its resort," a company statement said.
"We appreciate the continued support of our investors," said Revel's chairman and chief executive officer, Kevin DeSanctis. "The additional capital will provide us with the liquidity necessary to allow the market to recover from Hurricane Sandy and execute our strategic build-out of exciting new gaming, food and beverage, and entertainment amenities."
Revel recently installed new management to run its 1,400-room hotel, and last month it recruited Darlene Monzo, former vice president of marketing at Parx -- Pennsylvania's top-grossing casino -- to be its senior vice president of marketing.
In August, lenders agreed to double Revel's credit line to $100 million to get it through this year and into 2013 after monthly casino revenue continued to fall well below expectations.
The exact amount and structure of the latest request for additional capital are being negotiated. The company said it hopes to close on the financing within 45 days.
Revel, which debuted April 2, also reported total net revenue of $61.8 million, up 12.2 percent versus the $55.1 million reported for the second quarter. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was negative $12.2 million for the third quarter, compared with negative $22.9 million for the second quarter.
Though the whole Atlantic City gaming market suffered after Sandy's hit to North Jersey and New York -- two key feeder markets -- gaming analysts say Revel was more vulnerable because of its huge debt load and because it has been open less than a year and is still trying to gain a following amid a still-struggling economy and fierce regional competition.
Contact Suzette Parmley at 215-854-2855 or firstname.lastname@example.org.
(c)2012 The Philadelphia Inquirer
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