Revel plans to file for Chapter 11

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ATLANTIC CITY – Revel Atlantic City announced tonight (Tuesday, Feb, 19) that it plans to file for Chapter 11 reorganization.

The company said it has “reached agreement with a majority of its lenders to significantly reduce its debt and strengthen its balance sheet.”

The restructuring is expected to reduce Revel’s debt by more than $1 billion through an exchange of debt for equity. It will also “recapitalize through consensual prepackaged Chapter 11 reorganization.”

Revel says it will continue normal business operations and honor obligations in the ordinary course of business while undergoing the financial restructuring. It plans to implement the restructuring through voluntary, prepackaged Chapter 11 cases, and intends to complete the restructuring early this summer.

The restructuring is not expected to impact Revel’s guests, employees and vendors, company officials said. All services, dining, scheduled entertainment, programming and events are expected to move forward without change or interruption, and employees and vendors will be paid in the normal course of business.

“Today’s announcement is a positive step for Revel,” said Kevin DeSanctis, Revel's chief executive officer. “The agreement we have reached with our lenders will ensure that the hundreds of thousands of guests who visit Revel every year will continue to enjoy a signature Revel experience in our world-class facility.”

After undertaking a comprehensive strategic review of restructuring alternatives, “the company determined that a prepackaged Chapter 11 would offer the best opportunity for Revel to strengthen its balance sheet and would provide the company with the financial flexibility and resources to invest in the growth of the business,” the announcement said.

As part of the restructuring, certain of Revel’s lenders will provide approximately $250 million in debtor-in-possession financing (DIP), approximately $45 million of which constitutes new money commitments and approximately $205 million of which constitutes prepetition debt.

No taxpayer funds will be used to finance the restructuring, the announcement said.

The $2.4 billion, 1,898 room resort was built with support of $260 million in tax-increment financing by the New Jersey Economic Development Authority which supported infrastructure improvements in the South Inlet neighborhood adjacent to the Revel development.

“The reduction of debt service expense this agreement facilitates will greatly improve Revel’s cash flow to better support day-to-day operations,” said Michael Garrity, Revel’s chief investment officer. “This restructuring positions Revel for long-term success by providing the company with the operational flexibility to invest in the growth of our business.”

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