Station casinos, like many other gaming industry leaders, are struggling in the current economic environment. The huge debt burden and tight credit markets have pushed the gambling giant to the brink of filing for bankruptcy.
The company had been struggling for nearly a year, but it wasn’t until Feb. 2 that management asked bondholders to approve the restructuring plan, after missing the first bond payment that failed to repay $14.6 million. Station Casino, which failed to pay $15.5 million more in March, has little choice left.
Negotiations to restructure the company voluntarily are still ongoing, but have yet to be approved by bondholders. The proposal includes a debt exchange proposal that offers bondholders 10 cents to 50 cents per dollar in new notes and cash. This will allow the company to organize Chapter 11 documents by summer. An alternative to the station could be to declare complete bankruptcy with no other solution.
Boyd Gaming, a longtime rival in the same market, this month extended its offer to buy a lot of assets from the station twice. The properties they will acquire include a new Alliente Station, Green Valley Ranch Resort, Wild West, Santa Fe Station, Texas Station, two Fiesta facilities and several small gaming businesses. The station will still own large parcels of Sunset Station, Boulder Station, Red Rock Resort and Palace Station and untapped real estate in the Las Vegas Valley.
Despite some of its own financial challenges, Boyd Gaming has shown that it can spend $2 billion within its credit range to finance the purchase.
Industry analysts agree on how favorable the acquisition is for Boyd Gaming, and acknowledge that it may offer some of the station’s unsecured lenders a better deal.
“I think Boyd is taking advantage of the potential opportunity and trying to capitalize on the bankruptcy proposal,” said Deutsche Bank game analyst Bill Lerner upon hearing the proposal. “Boyd is apparently offering subordinated unsecured borrowers a better deal than they can get away with the company’s offer.”
Dennis Farrell Jr. of Wachovia said bondholders at the station could benefit better from Boyd Gaming’s offer than from a restructuring offer.
Joel Simkins of Macquarie Securities said the acquisition bid will give Boyd Gaming more than a third of the Las Vegas-area gaming market. 카지노사이트 순위
So far, Boyd Gaming has extended this offer twice and Station Casino has declined both times. Can we continue to reject this offer in the face of creditors who want to make the most of their profits? Only time will tell, but station casinos may not have enough time to get through this crisis.