Trump bailout progressing; overdue bond payment likely

John Curran

Thursday, May 27, 2004 | 9:29 a.m.

ATLANTIC CITY -- Donald Trump's financially troubled casino company expects to make good on a critical $73.1 million bond payment this week, company officials said Wednesday.

The interest payment on $1.3 billion in Trump Atlantic City Associates bonds was due May 1, but Trump Hotels & Casino Resorts Inc. has a 30-day grace period in which to pay.

The payment should be made by Friday, Executive Vice President and General Counsel Robert Pickus said.

Meanwhile, negotiations are continuing between Trump Hotels, DLJ Merchant Banking Partners III and Trump's bondholders for a proposed $400 million bailout.

Under it, Trump would step down as chief executive but remain as chairman of the company, which would be renamed Trump International. In addition, his ownership stake -- now 56 percent -- would be reduced to 20 percent.

DLJ Merchant Banking III, a private equity arm of investment banker Credit Suisse First Boston, is not expected to close on the deal until later this year.

The deal may hinge on Trump's bondholders' willingness to take a discount on their holdings. Trump executives say those negotiations are ongoing and encouraging.

Credit Suisse spokeswoman Victoria Harmon declined comment on the progress of the deal.

Struggling under $1.8 billion in debt, Trump Hotels -- which owns Trump Taj Mahal, Trump Plaza and Trump Marina casinos here -- has been unable to make capital improvements at a time when competition is increasing.

Trump Hotels lost $87 million last year, and two of its three Atlantic City properties have started 2004 on rocky notes -- Trump Plaza reported a 15 percent decline in gross operating profit and Trump Taj Mahal reported a 7.4 percent decline.

A bailout would reduce Trump Hotels' debt and free up money for possible expansions of the Atlantic City casinos.

Without it, the company's status as a "going concern" is in jeopardy, auditors Ernst & Young warned in a letter to Trump Hotels' board of directors in March. The letter was made public with the filing of the company's annual report.

In trading Wednesday, Trump Hotels shares rose 16 cents, or 9 percent, to close at $1.97 on the New York Stock Exchange.

Oscar loves forcing developers to sign labor peace agreements, Culinary loves the city's downtown plans and all is forgiven (1 Comment)

14 hours, 3 minutes ago

26 Thu
27 Fri
28 Sat
29 Sun
30 Mon

DJ Battle at Drai's

Drai's Afterhours | 10 p.m. to 11:59 p.m.
2012 at Cheyenne Saloon

Cheyenne Saloon | 10 p.m. to 11:59 p.m.
Sampson's Army at the Double Down Saloon

Double Down Saloon | 10 p.m. to 11:59 p.m.