Onex to take Control of Tropicana in Las Vegas

Onex Corporation has acquired some of Tropicana Entertainment LLC’s debt at a discounted rate, which will give the private equity firm control of the company’s prized Las Vegas Strip property after it emerges from bankruptcy. Tropicana

Tropicana’s reorganization plan, which was approved by a Delaware bankruptcy court earlier this month, eliminates more than $2.4 billion in debt and more than $125 million in annual interest payments from the books. 

Onex leveraged Tropicana’s depressed economic condition and bought more than $200 million of the privately held company’s $440 million term loan, which is secured by the 51-year-old Tropicana Resort & Casino. Toronto-based Onex will pay for the debt with a credit agreement specifically set up for the purchases, according to a recent securities filing.

Onex partner and former MGM Mirage President Alex Yemenidjian will become chief executive of the Las Vegas casino under terms of Tropicana’s restructuring plan. 

Tropicana Resort & Casino rests on 34 acres in Las Vegas and includes more than 1,850 hotel rooms, a casino of about 61,000 square feet, five restaurants and an 850-seat showroom. 

Tropicana Entertainment’s reorganization also includes an exit financing commitment from Icahn Capital, a company owned by billionaire investor Carl Icahn.  Icahn has been interested in the company’s Atlantic City, N.J., casino, which will be sold in a bankruptcy court auction.

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