ATLANTIC CITY, N.J. — Donald J. Trump will pay about $29 million more for the unfinished Taj Mahal, and Merv Griffin will contribute an additional $25 million in equity when he buys Resorts International Inc., the two men announced late Thursday.
The two moves taken together will increase the amount of cash and reduce the debt that Resorts will have after the various transactions are completed.
Trump agreed to pay $18 million more for the 1,250-room Taj Mahal and to waive about $11 million of purchase price adjustments, effectively increasing his purchase price to $284 million.
Griffin agreed to invest an additional $25 million in cash in the company.
"Our agreement today, together with the additional equity in Resorts, should help significantly in clearing financial regulatory hurdles at the Casino Control Commission and completing these transactions," Griffin said.
Financial Stability Key
The state casino commission was scheduled to start a hearing Friday on Griffin's request for interim casino authorization. Griffin needs the commission's approval on that request before the deal can be completed.
A primary focus of the casino commission's hearing will be the financial stability of Resorts after the deal is completed.
Under Griffin's original proposal, Resorts would not generate enough cash flow to service its debt. To ensure the debt service is met, Griffin had planned on selling some assets and on establishing a reserve of $25 million to cover interest payments.
The changes agreed to by Griffin and Trump will put the company in a better position to cover debt service out of cash flow, and it will be under less pressure to sell assets.
Resorts stock fell $1.50 a share to close at $30 Friday in active New York Stock Exchange trading.