|Tropicana plans of reorganization approved by US Bankruptcy Court
|Plans call for formation of two substantially deleveraged enterprises
Las Vegas, NV - The US Bankruptcy Court in Delaware today approved Tropicana Entertainment, LLC's creditor-supported plans of reorganization, which include an exit financing commitment from Icahn Capital. The Court action, which came on the one-year anniversary of Tropicana's filing for Chapter 11 protection, clears the way for the company to receive approval to implement the plans from gaming regulators in Indiana, Louisiana, Mississippi, Nevada and New Jersey.
Last month, Tropicana obtained the requisite votes from its creditors to form two operating enterprises: one comprised of Tropicana's assets outside of Las Vegas (in court filings referred to as "OpCo") and the other made up solely of the Tropicana Casino & Resort on the Las Vegas Strip (in court filings referred to as "LandCo"). The companies will be owned by separate groups of creditors who will exchange their debt for equity in the reorganized enterprises. Unsecured creditors will receive warrants to purchase shares or cash and will be entitled to certain litigation proceeds.
"We are quite pleased with the results of what was a very successful and efficient reorganization process," said Tropicana Entertainment CEO Scott C. Butera. "Tropicana exits Chapter 11 one year after filing with a new management team, solid ownership and a substantially deleveraged balance sheet. We are now equipped not only to endure the economic circumstances facing the casino gaming industry today, but also to take advantage of opportunities as the industry rebounds in the years ahead."
Under Tropicana's approved reorganization plans, the new companies shed more than $2.4 billion in debt and eliminated more than $125 million in annual interest payments. The plans have the companies emerging from Chapter 11 with substantial cash on hand. OpCo's $150 million exit loan commitment from Icahn Capital will be used to repay $65million in DIP financing and certain other indebtedness, plus fees and expenses related to the exit financing. It will also be used to pay court-approved administrative claims and expenses, provide working capital, and for other general corporate purposes.
In addition to an improved balance sheet, Butera cited operations enhancements that will make the businesses run more efficiently and effectively. He noted improvements across all back office and administrative areas including finance and accounting, financial planning and analysis, internal audit, information technology, human resources, legal and marketing.
In addition, Butera said that the company's contract and lease portfolios have been revamped to gain greater economies, that relations with regulatory authorities have been enhanced, and that the company now has true working relationships with organized labor and with the communities in which it operates.
Reflecting on the accomplishments of the past year, Butera said, "We could not have achieved this outcome without a spirit of cooperation on the part of everyone involved: our creditors, directors, members of the new management team, and all of the advisors involved. Our employees also deserve a lot of credit."
The next step is for Tropicana to obtain regulatory approval to implement the plans.
About Tropicana Entertainment
Headquartered in Las Vegas, Nevada, Tropicana Entertainment, LLC is one of the largest privately held gaming entertainment providers in the United States. The company operates 540,000 square feet of casino space with 15,000 slot machine positions. With more than 11,000 employees and 8,300 hotel rooms at its properties, it produces in excess of $1.0 billion annual revenue. More information is available at www.tropicanacasinos.com. None of the information contained on the company's website shall be deemed incorporated by reference or otherwise included herein.
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|May 05, 2009