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’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.