Friday, Aug. 16, 2002 | 11:13 a.m.
DOW JONES NEWS SERVICE
Aladdin Gaming LLC is seeking court authorization to extend its debtor-in-possession financing facility through Dec. 31, and to halve the commitment amount to $25 million from $50 million because business has been stronger than expected.
The amended DIP facility would give it a "safety net" through the end of the year at a minimal cost as it seeks to improve operations and continues to try to sell its casino and hotel resort in Las Vegas, the company said in court papers.
There were no amounts outstanding under the DIP agreement as of July 25. The U.S. Bankruptcy Court in Las Vegas on Dec. 4, 2001, approved the $50 million DIP agreement with a group of lenders led by Bank of Nova Scotia.
As well as extending the DIP loan and cutting the amount in half, the proposed amendment reduces the unused availability fee payable to the lenders from 1.5 percent to 1 percent per year, retroactive to July 11.
A hearing on the DIP loan amendment is set for Tuesday.
The court recently granted the company's request for a two-month extension of its exclusive periods for filing a Chapter 11 reorganization plan and soliciting plan votes.
William M. Noall of Gordon & Silver Ltd., counsel for the company, said that the court extended Aladdin's exclusive plan filing period through Oct. 1 and its exclusive vote solicitation period through Nov. 30. Plan filing exclusivity was set to expire Aug. 1.
The company has been on a dual track during its bankruptcy proceeding -- exploring a sale of its assets while trying to draft a stand-alone reorganization plan.
While bidding procedures were approved by the court -- over the objection of pre-petition lender General Electric Capital Corp. -- Noall said that the procedures don't set a specific timetable for the sale.
As reported, GE Capital said that Aladdin need not rush into an asset sale outside of the confirmation process because its financial position has steadily improved since it filed for Chapter 11 bankruptcy protection.
Jeff Truitt of KPMG, the point person for the sale, has been keeping the creditors' committee and lenders apprised of the sale talks that are under way, Noall told Dow Jones Newswires.
Although Judge Robert C. Jones indicated that he'd be looking for the company to file something regarding the terms of a sale or reorganization plan by the end of the summer, Noall said that the company isn't working under any specific deadlines, particularly because its property isn't operating at a negative cash flow.
Separately, the company is seeking court approval to lease space in its resort to Riclin Inc. for use as a wedding chapel.
The company will receive 10 percent of the gross sales/receipts of the wedding chapel from Riclin as rent. Based on Riclin's projections for the wedding chapel, Aladdin expects to earn rent of $40,000 in 2003 and $50,000 per year for the rest of the five-year lease.
The wedding chapel will generate additional revenue for Aladdin's resort as its newlyweds patronize the resort's other facilities, including its rooms, restaurants, and gaming and entertainment facilities, the company said in a court filing.
The company said that almost all the major hotel-casinos in Las Vegas have a wedding chapel.
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