Trump Entertainment to miss bond interest payment
NEW YORK (Reuters) - Casino operator Trump Entertainment Resorts Inc TRMP.O said on Friday it will not make a $53.1 million bond interest payment due on December 1 in an effort to "maintain sufficient liquidity."
Trump said a 30-day grace period will apply to the missed interest payment and that during this period it will pursue discussions with lenders to restructure the company's capital structure.
The Atlantic City-based casino company said there can be no assurance that any agreement will be reached.
Revenue at Atlantic City's casinos dropped by 9.9 percent to $346.2 million in October from a year ago as the national economic downturn deepened the gambling industry's woes.
The October decline followed a 15.1 percent plunge in September, the biggest overall fall in gaming revenue in the 30-year history of New Jersey's gambling capital, according to the state's Casino Control Commission.
Trump Entertainment, chaired by property magnate Donald Trump, was created out of a bankruptcy restructuring in 2005.
Its shares have fallen from $5.70 last December to a close of 31 cents on Friday.
CASINO INDUSTRY STRUGGLES
Casino companies have suffered over the past year as the gambling boom in Las Vegas has fizzled, tight credit markets have jeopardized growth plans and the Chinese government has acted to slow down the Macau gambling market.
The once-booming sector is now facing a wave of restructuring or even bankruptcies, as it struggles to finance new projects and casinos see customers put a tap on spending.
In the last year, casino operator Tropicana Entertainment LLC has filed for bankruptcy while a deal to take Penn National Gaming Inc (PENN.O) private fell apart as the sector turned sour.
On November 7, Trump Entertainment posted a third-quarter net loss of $139.1 million, or $4.39 per share, compared with a year-earlier profit of $6.6 million, or 21 cents per share.
Net revenue fell to $198.3 million from $216.6 million.
