ATLANTIC CITY, N.J. (AP) — Revel, Atlantic City's newest casino, is worth just a fraction of the $2.4 billion it cost to build the resort and could wait another four years before becoming profitable.
Those revelations were made in filings to federal securities regulators earlier this week by the struggling resort, which is expected to file for Chapter 11 bankruptcy protection on Monday.
The Press of Atlantic City, citing the filings, reports the numbers were included in a nearly 400-page disclosure statement Revel sent to creditors as part of the casino's plan to file a prepackaged bankruptcy case. That filing is expected to take place Monday.
Revel says next year may be the first in which it brings in more money than it costs to run the business. When other costs are added, it could be 2017 before Revel operates in the black.
According to the disclosure forms, Revel cannot continue to service the $1.5 billion in debt it carries and must "deleverage" that burden. The Chapter 11 filing will call for converting about $1 billion of that debt to equity into the company for lenders, leaving it with $272 million in debt.
"The debtors believe the plan, which contemplates a significant deleveraging, is in the best interest of all creditors," Revel said in the disclosure forms. "Any other alternative does not in any way realize or recognize the value inherent under the plan."
Revel estimates if the casino was sold within the next six months instead of filing for bankruptcy, it would fetch only $246 million to $331 million as a sale price.
Information from: The Press of Atlantic City (N.J.), http://www.pressofatlanticcity.com
Copyright 2013 The Associated Press.