Company increases credit line by $300 million

Thursday, April 6, 2000 | 10:58 a.m.

Harrah's Entertainment Inc. increased its credit line to $1.9 billion, a 19 percent increase, the company announced Thursday.

The new agreement includes a $375 million, one-year credit facility and a $1.5 billion four-year facility, arranged by 33 banks. Harrah's currently has $1.2 billion in bank loans outstanding, leaving $700 million available.

Harrah's is said to be the leading contender to acquire Detroit's Greektown Casino, a market in which company officials have said they're keenly interested. Analysts say Harrah's probably will pay $130 million to $160 million for a minority stake in the casino, Detroit's third gaming property.

Separately, a Harrah's spokesman confirmed that the company spent $5 million to acquire an unspecified equity position in Zoho, a Silicon Valley Internet company.

Described as an "online hospitality marketplace," Zoho supplies a variety of hotel supplies to the hospitality industry. Through Zoho, Harrah's will be able to eliminate price differences in these supplies from property to property, spokesman Gary Thompson said.

"We use a lot of different products and prices vary, sometimes by 200 to 300 percent," Thompson said. "By using an e-commerce business-to-business marketplace, we think we can cut our purchasing costs by 5 to 10 percent."

Bloomberg News reported that Harrah's spends about $490 million to furnish and supply its 21 hotel-casinos each year, a figure Thompson could not confirm.