Las Vegas Hilton owner defaults on interest payments

Las Vegas Hilton owner defaults on interest payments

The loan represents a majority of the company’s $296 million in debt and equity. Payments total $3.5 million and correspond to three months (June, July, and August).  According to company representatives, the decision was made “in order to conserve liquidity for operating and other needs” and added that “is currently in discussions with its lender to negotiate a restructuring of its debt.” The term loan lender is Goldman Sachs Commercial Mortgage Capital L.P.

Representatives of Colony Resorts LVH Acquisitions said the Las Vegas casino & hotel lost $8.8 million in the second quarter compared to a loss of $9.8 million for the same period last year. The resort’s net revenue decreased from $47.5 million to $45.5 million, while casino revenue declined 9.1%, to $14.2 million in the second quarter. Hotel revenue remained steady at $19.3 million, while food and beverage revenue reported a decrease of 8.6% to $14.4 million.

During the second quarter, Hilton Hotels Corp. notified Colony Resorts LVH that is not renewing the property’s franchise license agreement effective next Jan. 3rd, 2011. Colony Resorts LVH said it’s been in “discussions with other major hotel brands” about a new brand name, however, the company warned that if it is unable to reach a new agreement with a major hotel brand, its “financial condition … would be adversely affected.”

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