Onex Corp. has picked up some of Tropicana Entertainment LLC's debt at a discounted rate, which will give the private equity firm control of the company's prized Las Vegas Strip property once it emerges from bankruptcy.
Tropicana's reorganization plan, which was approved by a Delaware bankruptcy court earlier this month, eliminates more than $2.4 billion in debt and more than $125 million in annual interest payments.
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Onex took advantage of Tropicana's fragile state and bought more than $200 million of the privately held company's $440 million term loan, which is secured by the 51-year-old Tropicana Resort & Casino. Toronto-based Onex will pay for the debt with a credit agreement specifically set up for the purchases, according to a recent securities filing.
Onex partner and former MGM MIRAGE President Alex Yemenidjian (pictured) will become chief executive of the Las Vegas casino under terms of Tropicana's restructuring plan.
Tropicana Resort & Casino rests on 34 acres and includes more than 1,850 hotel rooms, a casino of about 61,000 square feet, five restaurants and an 850-seat showroom.
Tropicana Entertainment's reorganization also includes an exit financing commitment from Icahn Capital, one of billionaire investor Carl Icahn's companies. Icahn has been interested in the company's Atlantic City, N.J., casino, which will be sold in a bankruptcy court auction.
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