Aladdin Gaming, which runs a $1-billion Las Vegas casino, said Wednesday that it lost $20.4 million in the second quarter and is trying to amend its loan agreement because it doesn't have enough cash to make payments this year.
Las Vegas-based Aladdin is seeking an eighth amendment to its loan agreement with a group led by Bank of Nova Scotia, the company said in a Securities and Exchange Commission filing. The amendment would relax debt payments for the next 12 months, said Aladdin spokesman Lynn Holt.
The amendment would give Aladdin breathing room as co-owner London Clubs International tries to line up new investors in the Las Vegas Strip casino, which has attracted fewer visitors than expected since it opened last year.
Aladdin had $9 million in cash as of Aug. 7, which it said is insufficient to make debt payments. It has until Aug. 28 to reach an agreement on the loan amendment, which must pass muster with another lender, GE Capital Corp., Holt said.
The Aladdin includes a 116,000-square-foot casino and 2,567 hotel rooms. Visitation has been hampered by the casino's layout and lack of an existing customer base, analysts said.
The Aladdin casino, its hotel and restaurants generated $84.4 million in revenue during the second quarter. By comparison, MGM Mirage Inc.'s $1.6-billion Bellagio casino across the street had $204.5 million in second-quarter sales.
London Clubs said last month that it was boosting its stake in the casino to 85% from 40% and was seeking new investors. Real estate investor Jack Sommer and his family, along with other investors, will own the remaining 15%. The Sommers previously owned 60%.
Park Place Entertainment Corp., the largest casino company, owns 30% of the Aladdin's bonds and might be a possible buyer, analysts have said. A new owner would need to spend about $200 million on redesigning the property, analysts said.
The Aladdin is seeking other ways of raising cash, including the sale of an adjoining five-acre parcel.
The Aladdin boosted direct-mail marketing and added more entertainment in the second quarter to draw in gamblers, it said in the filing. Wins per slot machine per day rose by $6 to $93 from the first quarter, and the average winnings per table game rose $834 to $2,964 a day in the same period.
The Aladdin property includes the 500,000-square-foot Desert Passage Mall, run by Toronto developer TrizecHahn Corp.