Colony Capital and Fertitta Gaming have teamed up with Station Casino lenders to launch a $772 million stalking horse bid to take control of the bankrupt US casino operator.
The reorganisation plan would see a newly-formed company owned by Colony, Fertitta and some of Station Casino’s mortgage lenders acquire substantially all of the assets of the casino operator, including the company’s Santa Fe Station, Texas Station, Fiesta Henderson, Fiesta Rancho and Native American projects.
In a statement, Station said a committee of lenders representing 60 percent the company’s senior secured bank debt had backed the stalking horse bid. This means the reorganisation plan now has the support of 90 percent of Station Casino’s debt holders.
If the deal is approved by bankruptcy court in the summer, Fertitta Gaming – owned by Frank and Lorenzo Fertitta – will take a 46 percent stake in the venture, while Colony and the mortgage lenders will own the remaining 54 percent stake. The mortgage lenders in question hold debt secured by Station Casino’s Red Rock Casino, Resort Spa, Palace Station, Boulder Station and Sunset Station.
“We are pleased to have reached agreement with the steering committee of the Opco senior lenders on the acceptance of our stalking-horse bid and our plan of reorganisation,” Station chief executive offer Frank Fertitta III told the Las Vegas Sun.
Station expects to emerge from bankruptcy by the end of the year. A court hearing on Station's reorganisation plan is scheduled for 15 and 16 July.
Las Vegas-based Station filed for bankruptcy in July 2009 after it failed to restructure its more than $3 billion debt load.
Colony led a consortium of investors in the $5.4 billion acquisition of Station in 2007, assuming $3.4 billion of debt. The private equity real estate firm invested $1.28 billion from its Colony Investors VII and VIII funds, on top of a $300 million mezzanine investment, for a 75.9 percent stake in the operating company. The Fertitta family invested $902 million in the Station group.