Revel Eases Pressure With $100 Million Loan

Revel Eases Pressure With $100 Million LoanOver the past five years, Atlantic City’s casino industry has been in steady decline and its annual gaming revenue is currently down by more than 30% to around $3.3 billion compared to its peak of $5.2 billion in 2006.
That was the year Pennsylvania opened its first casino and since then the state with its 11 casinos has gone on to usurp Atlantic City’s title as America’s second biggest gambling resort. Nevertheless, on May 25th, Atlantic City opened its new $2.4 billion 48 storey casino leisure complex called Revel, which it hoped would revitalize its flagging gambling market.
However, the initial signs have been far from encouraging and after the first three months of operation Revel announced $35 million of losses, having generated just $55 million in net revenue during the second quarter. Adding to the worrying situation are questions hanging over Revel’s financial standing, and the complex came under intense pressure recently after casino union president Bob McDevitt of ‘Local 54 of the Unite-HERE’ sent a letter to the state Division of Gaming Enforcement over $27 million in outstanding bills and lawsuits against Revel. As Bob McDevitt explained to ‘The Daily Journal’ at the time:
“This is a potential catastrophe. I deeply believe that. I’m not cheer-leading for this to happen. It doesn’t help me as a union head if they collapse and go under. These are potential workers we could organize.”
Fortunately, Revel has now managed to secure an additional $100 million from its lenders, which apparently will provide enough of a liquidity cushion to see the company through the whole of 2013. As Revel Entertainment CEO Kevin DeSanctis explains: “I would assume that once everybody reads about our closing [on the credit deal], folks would understand we now have liquidity. Almost any analyst will understand we’ll be liquid through 2013 and beyond.”
Although the pressure seems to have been alleviated for now, Revels next step will be to increase its casino winnings from last month’s tally of $17.5 million to somewhere in the “mid-20s.”

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