Trump Hotels & Casino Resorts has reached a resolution that will result in the Equity Committee agreeing to support the Plan and withdrawing its opposition to the Plan.
The settlement, which has also been consented to by the informal committees of the Company’s Trump Atlantic City Associates’ First Mortgage Notes and Trump Casino Holdings’ First and Second Priority Mortgage Notes, provides for the Company making a $17.5 million cash payment to the Company’s unaffiliated common stockholders in connection with the Plan. In addition, Donald J. Trump would exchange his right under the Plan to receive the former World’s Fair Site in Atlantic City, New Jersey for additional equity in the recapitalized Company, which would bring Mr. Trump’s stake to approximately 30% of the Company’s fully diluted common stock (including the Class A Warrants discussed below, and not including any shares to be reserved for issuance under management incentive plans). The World’s Fair Site would be sold at auction following the consummation of the Company’s recapitalization proceedings, and the net proceeds would be distributed to the Company’s unaffiliated common stockholders. The property would be subject to a perpetual negative covenant preventing future owners or any transferee, assignee, occupant or lessee from developing any gaming activities on the property.
The Class A Warrants to purchase up to an aggregate of approximately 8.29% of the recapitalized Company’s new common stock (on a fully-diluted basis) would be reallocated, with the unaffiliated common stockholders receiving Class A Warrants to purchase up to approximately 5.34% of the recapitalized Company’s new common stock and Mr. Trump receiving the remaining warrants to purchase approximately 2.95% of the new common stock. Upon consummation of the Plan and assuming the exercise of all of his warrants received under the Plan, Mr. Trump would be the largest individual holder of THCR common stock. The Company believes that the Equity Committee’s support of the Plan will expedite the reorganization process and help the Company meet its initial timeline to emerge from the court process by the beginning of May 2005.
The Company commenced its recapitalization proceedings on November 21, 2004. The Plan calls for an approximately $400 million reduction in the Company’s indebtedness with a reduced interest rate of 8.5%, representing an annual interest expense savings of approximately $98 million. The Plan also permits a working capital facility of up to $500 million secured by a first priority lien on substantially all of the Company’s assets, which is expected to allow the Company to refurbish and expand its current properties and permit the Company to enter into new and emerging markets. For information on the proceedings, including the detailed disclosure statement and the amended plan of reorganization, interested parties are encouraged to visit the Company’s website at www.THCRrecap.com. The hearing to confirm the Company’s Plan is scheduled to commence on April 5, 2005 in Camden, New Jersey.
Donald J. Trump, the Company’s Chairman and Chief Executive Officer, commented, “I firmly believe in the future of the Company, as evidenced by my increasing my overall ownership in the recapitalized Company to approximately 30%.” Scott C. Butera, the Company’s President and Chief Operating Officer, added, “We are pleased to have reached an agreement with the Equity Committee which provides additional value to our shareholders and facilitates the execution of the Company’s recapitalization plan. The Company’s plan now has overwhelming support from its major equity and fixed income stakeholders.”
murdok | Breaking eBusiness News
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