Bailout plan shelved for Donald Trump's casinos

By JOHN CURRAN
Associated Press Writer
September 23, 2004

ATLANTIC CITY, N.J. -- A proposed bailout of Donald J. Trump's casino company has been shelved, and Trump now says he may take the company private.

Trump Hotels & Casino Resorts and investment banker DLJ Merchant Banking Partners _ which announced the bailout plan last month as part of a prepackaged Trump Hotels bankruptcy _ said late Wednesday they had terminated discussions "by mutual agreement."

In a prepared statement, Trump said the company was pursuing restructuring proposals with its bondholders and that it "may pursue a potential privatization of the company."

Neither Trump himself nor Trump Hotels Executive Vice President Scott Butera returned calls seeking comment Thursday.

DLJ officials weren't talking, either. The company, a private equity arm of Credit Suisse First Boston, had no comment, according to Victoria Harmon, a spokeswoman for Credit Suisse First Boston.

Trump has been searching for a way to save his cash-strapped casino company for months.

The company, which operates three casinos in Atlantic City, has $1.8 billion in debt and is so overburdened with interest payments it has been unable to finance improvements or expansions to keep up with Atlantic City competitors.

Under the proposed DLJ bailout, announced Aug. 9, Trump would have surrendered his majority stake and his title as CEO but left his name on the company and kept a 25 percent interest.

But Trump needed bondholders to sign off on the restructuring, and they apparently were not ready to. Lisa Gonzalez, a spokeswoman for Chanin Capital Partners, which represents holders of Trump Casino Holdings bonds, declined comment.

In trading Thursday morning, shares of Trump Hotels & Casino Resorts slipped 5 cents to 44 cents in over-the-counter trading.

One analyst said it was unlikely Trump could raise the money to take the company private. Without a cash infusion, bankruptcy appears to be his only option, according to casino industry analyst Jane Pedreira of Lehman Brothers.

"He's in a tough spot right now," said Pedreira. "If he has to file, his name will be in the press for two years or however long it takes to get through bankruptcy."

 

 

 

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