Friday, March 26, 2010 | 3:18 p.m.
Riviera Holdings Corp. of Las Vegas reiterated Friday that it’s in talks with creditors about restructuring its debt – but continued to avoid comment on whether Starwood Capital Group LLC is preparing to take over Riviera through a prepackaged bankruptcy.
Bloomberg News reported this week that Starwood, headed by Barry Sternlicht, along with other investors has purchased control of Riviera’s first mortgage loan at a discount and is engineering a prepackaged bankruptcy for Riviera.
Sternlicht in the 1990s was a player in Las Vegas when another company he headed, Starwood Hotels & Resorts, owned Caesars Palace and the Desert Inn. Caesars Palace and other Caesars properties were later to sold to Park Place Entertainment, which itself was acquired by Harrah’s Entertainment. The Desert Inn was sold to Steve Wynn.
Riviera, owner of the Riviera hotel-casino on the Las Vegas Strip and a casino in Colorado, the Riviera Black Hawk, said in its annual report today:
"With the aid of our financial advisors and outside counsel, we are continuing to negotiate with our various creditor constituencies to refinance or restructure our debt. We cannot assure you that we will be successful in completing a refinancing or consensual out-of-court restructuring, if necessary. If we were unable to do so, we would likely be compelled to seek protection under Chapter 11 of the U. S. Bankruptcy Code."
That’s the same language Riviera used in reporting third quarter financial results in November. Riviera has so far declined comment on Sternlicht's reported interest in the company.
Riviera, which has nearly $282 million in debt and other obligations, in February 2009 defaulted on its $245 million credit facility after the recession reduced business at its properties.
Also Friday, Riviera disclosed it lost $5.6 million or 45 cents per share on revenue of $30.2 million in the fourth quarter. That compares to a loss of $12.7 million or $1.02 per share on revenue of $36 million in the fourth quarter of 2008.
Riviera holdings said that for all of 2009, the 2,075-room Riviera in Las Vegas generated casino revenue of $41.2 million, down 18.6 percent from 2008. Room revenue of $35.5 million fell 32.4 percent as the average daily room rate of $60.60 tumbled 27 percent from 2008.
Riviera Las Vegas generated EBITDA, a profitability measure defined as earnings before interest, taxes, depreciation and amortization, of $9.6 million in 2009, down from $18.75 million in 2008.
EBITDA for Riviera Black Hawk in 2009 was $9.9 million, down from $12.1 million.