The parent company of the Stratosphere and three other area hotel-casinos posted a net loss of $1.6 million in the first quarter ended March 31, the company reported today with the Securities and Exchange Commission.
American Casino & Entertainment Properties’ loss increased from the $266,000 loss posted in the first quarter last year, according to a filing with the Securities and Exchange Commission. The loss was driven by $11.9 million interest expense on the company’s $1.1 billion debt load.
According to a Wednesday article in the Wall Street Journal, the company’s owner.
Whitehall Street Real Estate Funds. has been in discussions to restructure the debt with its lender, Goldman Sachs, due to concerns that the company may default if gaming and visitor numbers continue to decline.
Net revenues dropped 17.9 percent to $93.7 million from $114.1 million last year, driven by a 13.9 percent decrease in casino revenues, a 35.3 percent decrease in hotel revenues and a 20.9 percent in food and beverage revenues.
The company was able to trim 10.4 percent from its total costs and expenses.
According to the article, Whitehall, which is an affiliate of Goldman, is finalizing terms of an agreement that would see Goldman forgive $593 million of the $1.1 billion debt load. Whitehall would also be released from an additional $200 million in additional debt. In exchange for the debt relief, a mortgage unit of Goldman would gain a 22 percent interest in the company, the article said.
None of this activity, which apparently began in April, was discussed in Thursday’s earning report.
American Casino, owns Arizona Charlie’s Boulder, Arizona Charlie’s Decatur and the Aquarius in Laughlin, was acquired by Whitehall in February 2008 for $1.2 billion from billionaire financier Carl Icahn.
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.