$2.4b Revel Casino filing for Bankruptcy in March
After opening on April 2nd, 2012, the Revel Hotel & Casino has struggled majorly. The $2.4 billion project was expected to be a big attraction in Atlantic City, but instead continues to be a money pit for its investors.
So in order to stop the bleeding, the Revel Atlantic City will file Chapter 11 bankruptcy. The move is expected to trim the Revel’s long-term debt by $1.5 billion and keep the company afloat. CEO Kevin DeSanctis discussed the matter by stating:
Today’s announcement is a positive step for Revel. The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility.
When construction began on the Revel in 2006, investors had hopes that it would help Atlantic City return to its former glory. Unfortunately, the hotel & casino has done nothing but disappoint since it consistently ranks near the bottom of Atlantic City’s 12 casinos in terms of revenue.
January saw the beleaguered gaming establishment earn less than $8 million. They also operated at a total loss of $36 million in Q2 and Q3. This is even more disheartening when you consider that the Revel needs to pull in $33 per month just to meet the interest payments on $1.5 billion in debt.
Luckily for the Revel, Chapter 11 bankruptcy should manage to wipe out most of this debt. David Rebuck, who’s the director of the state Division of Gaming Enforcement, said:
The agreement between Revel and its lenders will allow for a necessary financial restructuring and improve the property’s financial condition going forward. We see this as a positive step that will allow Revel to comprehensively address its financial needs while continuing normal business operations.