Station Casinos Set To Emerge From Bankruptcy
Station Casinos suffered a heavy net loss of $69.6 million in its second quarter. The revenue in the locals gaming market kept on falling. The company had taken an important step to come out of bankruptcy earlier this month. All its properties are intact and the company announced that the loss for the quarter ended June 30 was 6 per cent less compared to a $65.3 million net loss last year.
The total revenues of the company amounted to $233.6 million this year. This is a 12.6 per cent decrease compared to the total revenue generated during the corresponding period last year at $267.2 million. The company filed for Chapter 11 bankruptcy last year with about $6 billion in debt. It did not hold any conference call this year to talk about its quarterly earnings.
Experts surmise that the Las Vegas locals market will be able to recover more slowly than the Strip. Although areas like Boulder Strip also incurred losses of up to 5.6 per cent, the main Station Casinos operate in the locals market. The private company’s officials said in Las Vegas that their net revenue in the second quarter was $214.7 million, which is a 12.7 per cent decrease as compared to the $245.9 million in the same quarter last year. The company also said that its net loss from major Las Vegas operations was $19.2 million, a decline from last year’s net loss of $15.6 million during the same quarter a year ago.
The Las Vegas results are not inclusive of Green Valley Ranch Resort and Aliante Station. These are owned by Station Casinos in a 50-50 partnership with Greenspun Corp. The company said its earnings were $3.2 million from Green Valley Ranch. Station Casinos recorded bankruptcy-related reorganization items of value $37.9 million during the three-month period. This amount also included professional fees and other costs of $31.2 million.
The company’s bilateral bankruptcy plan of reorganization would likely be approved by a federal bankruptcy judge in Reno next week. Now the company looks all set to emerge out of bankruptcy. A new holding company owned by real estate inventor Colony Capital was established in the first phase of the reorganization. The company secured lenders like Deutsche Bank and JP Morgan. It was also established with the help of Fertitta Gaming which was created by Station Casinos’ founders, brothers Frank Fertitta III and Lorenzo. The Fertittas will invest $85 million as their share in the company.
Fertitta Gaming won a bankruptcy-supervised auction to take over 11 casinos, American-Indian gaming contracts, and land holdings for $772 million on August 6. The only qualified bidder was Fertitta Gaming. The company will operate both sides of the reorganized company. However, Station Casinos will remain intact. This means that the family that founded Station Casinos will continue to control the its properties, the land held for future development, and the company’s tribal gaming partnerships.
The new company would take over Palace Station, Red Rock Resort, Boulder Station, Wild Wild West and its adjoining 100 acres, and Sunset Station. Half of the Station Casinos’ overall revenues come from these casinos. The National Indian Gaming Commission and Nevada gaming regulators will have to confirm the new corporate ownership structure as soon as the reorganization gets confirmed.