American Casino & Entertainment Properties (ACEP) is a casino holding company with its headquarters in the Stratosphere Las Vegas.[1][2] ACEP was a wholly owned subsidiary of American Real Estate Partners before it was sold to Whitehall Street Real Estate Funds on February 21, 2008.
In 2007 Whitehall Street Real Estate Funds who owned 40% of the Las Vegas Hilton, and was a passive investor in other casino properties made an offer of $1.3 billion for the four properties. The appraisal assigned a value of $718.443 million to the land under the four properties. The buildings were worth $365.59 million. The impressive land valuation seemed to be almost entirely based on the undeveloped 17 acres of land near the Stratosphere.
On 21 February 2008 the ownership of ACEP changed hands from the previous owner Carl Icahn, to Whitehall Street Real Estate Funds. As of 11 February 2008 Carl Icahn's personal fortune was calculated at $14.0 billion by Forbes, making him the 46th richest person in the world. The new owners retired the $255m senior notes held by the former owner, and replaced them with $1.1 billion in new notes held by Goldman Sachs Term Loans, that are due to be refinanced on March 11, 2010. The interest on these loans far exceeded the net income of the company in 2007. The income of the company had to grow to cover this new financing.
Unfortunately revenue peaked for the first quarter of 2008 when the company was purchased and by the 4th quarter began plummeting precipitously. The cost of the acquisition was so considerable that the company is now operating at a net loss. On March 4, 2009 the company announced they would begin layoffs.[3]
According to an article on Mary 13,2009 in the Wall Street Journal, Whitehall Street Real Estate Funds has been in discussions to restructure the debt with its lender, Goldman Sachs, due to concerns that the company may default if gaming and visitor numbers continue to decline. Whitehall, which is an affiliate of Goldman, is finalizing terms of an agreement that would see Goldman forgive $593 million of the $1.1 billion debt load. Whitehall would also be released from an additional $200 million in additional debt. In exchange for the debt relief, a mortgage unit of Goldman would gain a 22 percent interest in the company, the article said.[4]
Casinos
- Aquarius
- Arizona Charlie's Decatur
- Arizona Charlie's Boulder
- Stratosphere Las Vegas
References
- ^ "American Casino & Entertainment Properties LLC". Business Week. 2008-05-13.
- ^ Knight, Arnold M. (2007-04-24). "Icahn Sells Southern Nevada casinos". Las Vegas Review-Journal: p. 1A.
- ^ "Stratosphere Owner Lay Off Workers".
- ^ "Stratosphere parent company posts $1.6 million net loss".
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