Trump Says Payments Made On Trump Castle
ATLANTIC CITY, N.J. (AP) _ Donald Trump announced Monday that he made nearly $35 million in interest payments he owed bondholders in two of his three casinos.
Also Monday, Casino Control Commission chairman Steve Perskie denied a request by Trump’s newest casino - the Taj Mahal - to seal documents detailing the gambling hall’s restructuring of $675 million in bonds.
The deadline passed Saturday for Trump to make a $16.1 million bond payment on the Trump Plaza hotel and casino, and an $18.4 million payment on the Trump Castle. Grace periods for the two properties did not begin until Monday.
Trump said in a telephone interview Monday afternoon from New York that the Trump Organization infused a ″relatively small amount of money″ to make the Trump Castle payment. He would not specify how much the New York-based organization transferred to Trump Castle.
The Trump Organization’s chief financial officer, Stephen Bollenbach, said the amount was ″well under $1 million.″
The Trump Plaza payment was made entirely from that casino’s funds, Trump said. Bollenbach said both casinos have enough money handy, although published reports last week indicated the casino would have zero operating funds if it supplied all the money for the payment.
″We made the payment on time - in fact ahead of time if you look at the grace periods,″ Trump said.
He said he believed the casinos have turned the corner from a slump that began when the mammoth Taj Mahal opened April 2, taking away business from all the casinos in the city.
Trump said he believes Atlantic City can turn around before Trump Castle faces its next payment in June and added that he has no plans to sell the casino, one of two gaming properties not located on the city’s Boardwalk.
″I’m very proud of the property,″ he said. ″We just finished a large construction and ... that has hurt,″ he said.
Analysts said earlier Monday before Trump made his announcement that they would be surprised if Trump made the payment on the Trump Castle, which does not generate as much revenue as the Plaza.
Trump Castle failed last June 15 to make a $43 million bond payment, setting into motion an emergency bank loan that pledged Trump’s three casinos as collateral for the new loans.
The casino commission is now studying the financial stability of the Taj Mahal, which renegotiated its $675 million in debt one day after failing to make a $47.3 million payment due Nov. 15.
The documents released Monday detail a plan that would give bondholders half ownership in the Taj Mahal in exchange for an interest rate reduction from 14 percent to 12 percent, and spreading of the repayment date to October 1999 instead of 1998.
The casino intends to file a ″pre-packaged″ bankruptcy under Chapter 11 of the U.S. Bankruptcy Code and leave bankruptcy court by the spring.
The commission has said it intends to rule on the financial stability of the Taj Mahal at a still undetermined date in January. The gaming regulators will likely look at the financial stability of the other two properties after that.
The commission can take away the license of a casino operator if it finds the licensee is financially unstable.