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Riviera Holdings sells Colorado casino for $76 million

The owner of Riviera Black Hawk Inc. has agreed to sell the casino for
$76 million.

Riviera Holdings Corp., which owns the historic Riviera on the Strip, will sell the Colorado property to Monarch Casino & Resort Inc., owner of the Atlantis Casino Report Spa in Reno.

“This transaction is a true win-win for everybody involved,” Riviera Holdings President and CEO Andy Choy said in a statement. “Divesting the Black Hawk property allows us to focus on turning around the historic Riviera Las Vegas.”

Choy said the sale will mean the employees of Riviera Black Hawk will have “access to the resources they need to take the property to the next level.” Riviera Holdings said the purchase price includes $2.1 million of working capital.

The sale is subject to regulatory approval and is expected to close before the end of next year’s second quarter.

This was the first transaction for Riviera Holdings since it emerged from bankruptcy earlier this year in a deal arranged by hotelier Barry Sternlicht and other investors. Riviera Holdings filed for Chapter 11 bankruptcy protection in July 2010.

Sternlicht’s Starwood Capital Group owns 75 percent of the company, while Derek Stevens, owner of the Golden Gate in downtown Las Vegas, owns 21 percent.

The company was able to shed approximately $262.1 million in debt during the restructuring and now has a debt load of $50 million.

“In our view, the sale is positive for the company as the proceeds from the transaction can be used for various much-needed capital improvements at the company’s flagship Riviera Las Vegas property,” Union Gaming Research said in a report released Friday.

The companies didn’t say whether the casino will keep the Riviera name or what Las Vegas-based Riviera Holdings will do with the proceeds of the sale.

The Riviera Black Hawk casino generated net revenue of $39.8 million in 2010, down from $42.17 million the year before, the company’s filing with the Securities and Exchange Commission shows.

For the second quarter, Riviera Black Hawk generated revenues of $9.9 million, compared with $10 million for the first quarter.

The company’s Las Vegas casino reported revenues of $21.5 million in the second quarter, compared with $20.7 million in the first quarter.

Riviera Black Hawk opened in February 2000. The casino has 750 slot machines, a 252-seat restaurant and a 520-space parking garage. The casino employs 228 people.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.

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