ATLANTIC CITY, N.J. (AP) — Revel was supposed to help the struggling Atlantic City market turn around. Instead, it is the struggling casino-hotel that needs help turning around.
New Jersey’s top casino regulator said Wednesday that Revel Entertainment is seeking outside help with its finances as it struggles with over $1 billion worth of debt. David Rebuck, director of the state Division of Gaming Enforcement, said Atlantic City’s newest casino continues to negotiate with lenders.
“What I do know is they are looking for outside assistance beyond their management structure,” Rebuck said, adding he cannot say if a bankruptcy filing is likely for Revel.
The Wall Street Journal, citing unidentified sources, reported Wednesday that Revel has retained a law firm and an investment bank that often advise companies on bankruptcy filings. It adds that the casino is considering a Chapter 11 filing. The newspaper said Revel has retained Kirkland & Ellis, whose website says it helps “clients through the turmoil of situations involving financially troubled companies,” and Moelis & Co. an investment bank whose recent deals included helping The Tribune Company with a Chapter 11 bankruptcy filing.
Revel would not say whether it has retained the firms, which also declined to comment on Wednesday.
The newspaper said Revel is considering a pre-packaged Chapter 11 bankruptcy filing in which creditors would reach an agreement with management on terms of the bankruptcy before it is filed, thus limiting the duration of the bankruptcy.
Revel will only say it is evaluating various alternatives regarding its finances.
Michael Garrity, Revel’s chief investment officer, said in a prepared statement, “Revel has consistently worked to increase our financial flexibility, as evidenced by the additional capital we raised in December. We will continue to prudently evaluate various alternatives with regard to our capital structure.”
The $2.4 billion casino opened in April, but has lagged near the bottom of Atlantic City’s 12 casinos in terms of revenues. In January, it posted its second-worst month, winning less than $8 million from gamblers.
Revel has twice had to secure additional financing since August in order to ensure its operations could continue.
Rebuck said the gaming enforcement division constantly monitors all 12 of Atlantic City’s casinos’ finances, adding he is optimistic Revel and its lenders can work out a suitable arrangement.
“We’re at the table ensuring the negotiations between the two parties remain in place,” Rebuck said. “As long as they’re talking and working together, I’m very optimistic they’ll be fine operationally.”
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