LAS VEGAS, NEVADA -- In a year which has proved disastrous for many Las Vegas casino operators, Station Casinos may turn out to have been hit the hardest, or at least the first to get knocked down. The casino company was unable to convince bond holders to accept secured loans to replace unsecured ones for forty cents or less on the dollar, and now faces impending deadlines that only last-second negotiating can stave off.
Declines in revenues matched against a crippling debt situation have left Station Grand Casinos at the mercy of bank officials. If no new deal is reached in the next few days, it is expected that the company will break credit covenants, triggering acceleration of payment schedules.
Preparing to deal with debt restructuring, Station withdrew most of the cash still available to it on its present credit facilities, leaving it with stored cash in case the source is removed.
Speculation had been rampant that first Las Vegas Sands and then MGM Mirage might be the first big best casino operator to be forced into bankruptcy. Each has had severe liquidity problems, causing Sands owner Sheldon Adelson to loan his company close to a billion dollars, and MGM to turn to Dubai World to increase its ownership stake. MGM has also faced the debacle caused by principal owner Kirk Kerkorian's use of MGM Mirage stock to leverage his buying of Ford Motors stock, which has also plunged to fractions of its previous worth.
But Stations has taken on debt with rapid expansion, and the company rides a finer edge on profit than others, basing its business on locals and budget-conscious travellers. Now the company waits to see whether banks want to negotiate to eventually get full payment later, or force bankruptcy now.
Article Source:
http://www.onlinecasinosphere.com/news/reports/usa-casinos/station-casinos-tottering-on-bankruptcy-5362.php
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