Court OKs Revel's Chapter 11 reorganization plan
CAMDEN, N.J. (AP) -- Revel will be getting a new start soon - with new owners.
A bankruptcy court judge on Monday approved the Atlantic City casino's Chapter 11 reorganization plan that wipes out most of its debt and provides new money for it to operate.
Judge Judith Wizmur gave the OK to Revel's plan to grant an 82 percent ownership stake to lenders in return for canceling $1.2 billion worth of debt.
"The confirmation of our plan is the last major milestone of the restructuring process," Revel's interim CEO Jeffrey Hartmann said in a statement after the ruling. "We look forward to officially emerging from Chapter 11 by the end of this month with a right-sized balance sheet and a significant reduction in our annual interest expense. The restructuring has been nothing short of transformative for Revel, and I would like to thank our lenders for their ongoing faith in our business, as well as our guests, vendors and employees for their continued support."
Revel's annual interest payments will fall from $102 million to $46 million. The casino plans to put money that previously went toward debt to operations now.
Before filing for Chapter 11 protection in March, Revel had $1.52 billion in debt. Upon its exit from bankruptcy court, which could happen within days, it will have $272 million in debt.
"Upon emergence, we will enter the summer season on firmer financial footing, focused on driving growth and attracting guests to the property through an expanding range of amenities and exciting new programming," Hartmann said.
Revel has secured $350 million in exit financing, including a $75 million revolver to fund working capital and a $275 million term loan.
The $2.4 billion casino-resort has struggled since it opened 13 months ago and has ranked near the bottom of Atlantic City's 12 casinos in terms of the amount of money won from gamblers each month.
In filings with securities regulators in March, Revel said it was worth no more than $450 million and that it could take four years to become fully profitable.
Revel's bankruptcy filing lists $1.1 billion in assets and $1.5 billion in liabilities. It posted a $110 million operating loss from its April 2, 2012, opening through the end of last year.