Atlantic City’s Revel Resort Seeks New Financing After Reporting Losses
By James Shillinglaw
November 25, 2012 9:43 PM
Revel AC, Inc.,parent of the new Revel resort in Atlantic City, which opened earlier this year, said it is in active discussions with members of its lending group to provide additional capital for liquidity. While the exact amount and structure of the capital infusion continues to be negotiated, Revel said it expects to close on such additional funding within approximately 45 days. That additional funding is necessary because Revel has not losing money since it opened and also was hit by the effects of Hurricane Sandy in November. The resort also has made some major changes to senor management in recent months, including naming a new vice president of marketing and a new senior vice president of resort operations.
“The additional capital will provide us with the liquidity necessary to allow the market to recover from Hurricane Sandy, and execute our strategic build-out of exciting new gaming, food and beverage, and entertainment amenities,” said Kevin DeSanctis, Revel’s chairman and CEO. “These new offerings will allow us to enhance our product, improve our customer experience, and create value for our stakeholders.”
Revel also released financial results for the quarterly period ended Sept. 30, 2012, reporting total net revenue of $61.8 million, up 12.2 percent sequentially versus the $55.1 million reported for the second quarter of 2012. However, adjusted EBITDA for the third quarter of 2012 was down $12.2 million compared with Adjusted EBITDA down $22.9 million for the second quarter of 2012. Revel reported a net loss of $86.8 million for the quarter ending Sept. 30, compared with a net loss of $81.5 in the previous quarter.
“With six months of operations behind us, and the addition of new leadership in our hotel operations, we are encouraged by the progress we are beginning to see, particularly in the group and leisure segments,” said DeSanctis. “In addition, with the recently announced changes to our casino marketing leadership, our programming strategy and the new amenities we will be bringing on-line, we are confident we will see significant improvement within our gaming segment.”
Revel is also betting that it can reverse its financial fortunes by booking top entertainment, such as Kanye West, who is returning to perform three pre-New Year’s Eve shows at the resort.