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Yemenidjian Clearing Hurdle To Run Tropicana

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  • Yemenidjian Clearing Hurdle To Run Tropicana

    YEMENIDJIAN CLEARING HURDLE TO RUN TROPICANA
    By Brian K. Miller

    GlobeSt. com
    http://www.globest.com/news/1425_1425/lasvegas /179046-1.html
    June 5 2009

    LAS VEGAS-The state Gaming Control Board this week voted unanimously
    to recommend licensing approval for former MGM Grand executive
    Alex Yemenidjian to run the Tropicana Hotel Casino, a well-known
    but distressed resort asset on the Las Vegas Strip that is changing
    hands as it emerges from Ch. 11 bankruptcy protection. The Nevada
    Gaming Commission will consider the board's recommendation for final
    approval on June 18.

    Yemenidjian is part of Toronto-based Onex Corp., Canada's largest
    private-equity firm, which will take control of the 1,850-room
    Tropicana Las Vegas here later this year. After Tropicana Entertainment
    LLC filed for protection from creditors in May 2008, a special purpose
    Onex entity acquired more than US$200 million of the principal
    amount of Tropicana's $440-million term loan, which is secured by
    the 34-acre resort. The debt was purchased at various discounts as
    the first investment by Onex's third fund.

    The plan of reorganization for the resort, which is separate from
    the company's other assets, was confirmed in May 2009 and, subject
    to certain regulatory approvals. The [bankruptcy reorganization]
    plan provides for the secured creditors, including Onex and the
    other holders of the $440 million term loan, to receive 100% of the
    equity in the Las Vegas property. Onex says it expects to be in a
    position to take control of Tropicana Las Vegas later this year,
    the company stated.

    Last month, Onex said it believes the pro forma company is well
    positioned for a turnaround and able to withstand the current downturn
    in the Las Vegas market because it will have no debt, slightly more
    than $20 million in cash and a working capital facility.

    Yemenidjian is credited with stabilizing the MGM Grand for Kirk
    Kerkorian and, after that, his Metro-Goldwyn-Mayer film studio. A 2001
    profile in Forbes magazine refers to Yemenidjian as "the Wizard of
    MGM." Among other things he is currently is a director with Kerkorian's
    nonprofit Lincy Foundation, which works to improve the lives of people
    in Armenia. Both Yemenidjian and Kerkorian have Armenian ancestry.

    Tropicana is one of the oldest and best-known casino names in
    Las Vegas, in part due to its location at one of the busiest
    pedestrian intersections in the world, Las Vegas Boulevard and
    Tropicana Avenue. The property has approximately 1,850 hotel rooms,
    a 61,000-square-foot casino, five restaurants, an 850-seat showroom
    and approximately 1,800 employees. A $100-million renovation is
    planned after Onex and the other debt holders assume ownership.

    Last month the resort had to shut down its 560-room Paradise Tower
    after an inspection turned up a non-compliance issue related
    to unpermitted plumbing work performed in during a late 1990s
    remodeling. The tower remains closed.
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