Revel AC Inc. has reached an agreement with the majority of its lenders that will allow the Atlantic City casino hotel operator to enter into a prepackaged Chapter 11 bankruptcy reorganization in what is the latest attempt to salvage the project.
If the plan is filed as envisioned, Revel AC will get $250 million in debtor-in-possession financing from those lenders, of which $45 million is a new commitment and the rest debt that is already owed. The plan calls for a debt-for-equity swap.
In a statement, Michael Garrity, Revel AC chief investment officer, said, “The reduction of debt service expense this agreement facilitates will greatly improve Revel’s cash flow to better support day-to-day operations. This restructuring positions Revel for long-term success by providing the company with the operational flexibility to invest in the growth of our businesses.”
The company said no taxpayer funds will be used to finance the restructuring. New Jersey had stepped in 2011 and used its muscle to get the then already troubled not-yet-completed project back on track.
But since it opened last year, the Revel has been a bust—and that was prior to Hurricane Sandy. In November, Revel AC announced it was
In December, it did close on $150 million in credit from JPMorgan Chase, consisting of a $125 million term loan and an increase of $25 million to a revolving credit line.
Plans were to use the money to expand gaming and restaurant operations, the company said at the time.
