Station Proposes Casino Sale
Station Casinos owners Frank Fertitta III and Lorenzo Fertitta plan to keep a 46 percent stake in four casinos while selling 14 others through bankruptcy under a new reorganization plan.
The plan disclosed Thursday in a Securities and Exchange Commission filing by the Las Vegas-based casino operator calls for mortgage lenders holding debt to become the new majority owners of the Red Rock Casino Resort Spa, Palace Station, Boulder Station and Sunset Station. Station said the outstanding debt secured by the four casinos was $1.8 billion.
Station Casinos Inc. said the reorganization plan was filed with a federal bankruptcy court in Reno, Nev., where the privately held company’s case was filed in July.
Under the new plan, the Fertitta brothers will pay $85.6 million in cash for a 50 percent stake in the four casinos, then sell a 4 percent share to Colony Capital LLC.
The Fertittas would manage the properties under a long-term deal, according to the plan.
The casinos to be sold include Santa Fe Station, Texas Station, Fiesta casinos in two Las Vegas suburbs and 50 percent stakes in Green Valley Ranch Resort Spa Casino and Aliante Station, among other properties.
The company said it hopes a judge will approve its plan by this summer so the casino operator can emerge from bankruptcy before the end of the year.
Frank Fertitta III, chief executive of Station Casinos, said reaching the deal was a significant step toward restructuring.
“I’m committed to the successful reorganization of the company that my family founded,” he said in a written statement.
Marc Falcone, chief financial officer for Fertitta Gaming, said the Fertittas would try to buy the assets to be sold.
“Frank and Lorenzo Fertitta remain keenly interested in these properties, and Fertitta Gaming would like to aggressively pursue the acquisition of these assets,” Falcone said.
The company, which mainly runs casinos targeted toward residents of the Las Vegas area, has been struggling with debt every since it finished going private in November 2007.
Since then, the gambling economy has declined sharply, with Las Vegas deeply affected by fewer players wagering less money.
The economic recession significantly reduced Station’s revenues and hurt the company’s ability to refinance its debt.