Riviera delisting causes fall in shares

Friday morning's announcement by Riviera Holdings Corp. that it plans to delist its stock cut the company's already languishing shares down by nearly a third in heavy trading.

Riviera's stock price on the American Stock Exchange closed at 88 cents after opening at $1.29 per share.

Trading volume of the stock was 1.36 million shares at noon, roughly seven times the stock's average daily volume over the past three months, according to Yahoo Finance.

The stock was hit after the parent company of the Riviera on the Strip announced it will voluntarily delist from the exchange rather than spend money to meet the Amex's listing standards by a fall deadline. Amex notified the company in a letter dated Monday that it was not in compliance with its listing standards.

"We do not believe that we can develop and implement a plan that will put us in compliance with the Exchange listing standards by November 27th, as specified in the letter," company Chairman and Chief Executive Officer William Westerman said in a statement. "Moreover, we believe that the time, effort and resources required to develop and maintain a plan should be directed toward ensuring the continued viability of our company."

According to the statement, the company "has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable ... whether the company will be able to continue operations and/or meet its obligations as they mature."

The company posted a loss of $1 million in the first quarter ended March 31. Revenues dropped 27.7 percent, to $34.6 million, in the quarter.

The company received its first default notice on a $245 million loan with Wachovia Bank in late February. In early April, the company skipped a $4 million loan payment to Wachovia. Riviera Holdings said the company is still talking with Wachovia about restructuring its debts outside of bankruptcy court.

Riviera Holdings expects to delist its stock from Amex by June 25. It will seek to have its stock listed on the Over-The-Counter Bulletin Board.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.