Revel in Atlantic City Mulls Sale 6 Months After Bankruptcy ExitChristopher Palmeri
Revel AC Inc. said it’s exploring strategic options, such as a possible sale, and restructuring its loans, six months after the $2.6 billion Atlantic City casino emerged from bankruptcy.
The New Jersey casino, owned by investors who took over in May, hasn’t decided on any specific deal and can’t be certain one will occur, according to a statement yesterday. The company also said it obtained $75 million in additional financing.
Once owned by Morgan Stanley, the Revel Casino Hotel opened last year with the New Jersey resort city’s casinos in a downward spiral, buffeted by competition from neighboring states, the lingering effects of nationwide drop in gambling and later hurricane Sandy. Revel filed for Chapter 11 bankruptcy protection in March, 11 months after opening.
Atlantic City has seen casino revenue shrink 40 percent over the past six years as neighboring states expanded their gambling offerings. The parent of the Atlantic Club Casino Hotel, formerly the Atlantic City Hilton, filed for bankruptcy court protection on Nov. 6.
Revel said yesterday it doubled the size its first-lien credit agreement to $150 million. Proceeds will be used to pay off a $58 million revolving loan and for working capital.
The casino has retained Moelis & Co. as its financial adviser and White & Case LLP as counsel.
Through six months of 2013, Revel registered an operating loss of $81.7 million on revenue of $81 million, according to information filed with the state.
Atlantic City’s casino revenue fell 9.3 percent to $2.2 billion in the first nine months of this year, according to the New Jersey Division of Gaming Enforcement. Revel ranked eighth among the city’s 12 casinos in terms of gambling revenue in September, according to Bloomberg Industries research.
New Jersey Governor Chris Christie, re-elected to a second term this week, jump-started the stalled construction of Revel in February 2011 with a pledge of as much as $261 million in state aid. In 2010 he formed a state panel to take over Atlantic City’s casino district as part of an effort to revive the area.