* Deutsche Bank strikes deal to sell casino resort
* Bank inherited Las Vegas site after 2008 loan default
* Blackstone agrees to buy resort for $1.7 bln
(Adds details of deal, background)
FRANKFURT, May 15 Deutsche Bank has
struck a deal to sell its casino complex in Las Vegas to buyout
group Blackstone for $1.73 billion in cash, drawing a
line under an unwanted investment that has weighed on its
balance sheet for years.
The lender made a "small profit" from the sale of casino,
called The Cosmopolitan, a spokesman said on Thursday. Deutsche
struggled to sell the business and was forced to take heavy
writedowns on the business.
The sale will have a positive impact on the bank's capital
ratio. Under the Basel III bank rules in their most stringent
form Deutsche Bank's core tier 1 capital ratio will improve by
five basis points upon closing of the transaction, the bank
Deutsche Bank took over the 110,000 square-foot casino
resort after the previous owner defaulted on a loan in 2008.
The Cosmopolitan - which has the slogan "Just the right
amount of wrong" - has 1,325 slot machines, 121 table games and
2,960 hotel rooms, according to the resort's annual report.
The construction of the casino cost a total of $3.9 bln and
Deutsche Bank transferred the asset to its internal "bad bank"
in 2012, after taking writedowns of 760 million euros on the
The Cosmopolitan opened in December 2010, but made net
losses of $440 million over its first four years of operation.
Last year it saw revenues rise 9.5 percent to $652 million,
while adjusted earnings before interest, taxes, depreciation,
and amortization rose 56 percent to $103 million. The resort's
net loss decreased to $94.8 million from $106.6 million in 2012.
Last month, Australian casino operator Crown Resorts
had been said to be preparing a $2 billion bid for Las
Vegas complex, according to a media report.
(Reporting by Arno Schuetze and Edward Taylor; Additional
reporting by Alexander Hübner; Editing by Elaine Hardcastle)