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Trump Hotels
has new plan to emerge
from bankruptcy
December 17
Yesterday, Donald
Trump's hotel and casino
company filed an
official plan to emerge
from bankruptcy. The
plan calls for Trump to
remain as chairman of
the company and permits
its bondholders the
controlling equity claim
in the company and new
notes in trade for their
debt.
In
the potential deal that
was filed yesterday with
the
US Bankruptcy Court in
Camden, N.J., Trump will
invest $55 million in
the company. The terms
are the same terms
concluded between the
company and its
creditors prior to the
bankruptcy filing.
In the deal ,
Trump would keep his
current positions at the
company but reduce his
ownership stake by
nearly 50%. Also,
bondholders would swap
their debt for $74
million in cash, $395
million in common stock
and $1.25 billion in new
notes. It is reported
that over bondholders
have already signed
agreements in support of
the new idea.
Trump's company owns
four casinos and has
accrued $1.8 billion in
debt. The company filed
for protection back in
November and will be
able to emerge from
bankruptcy in March 2005
if creditors and the
court allow the deal.
Trump Hotels has secured
a $500 million dollar
loan from Morgan Stanley
security firm. The terms
are subject to court
approval.
Included in the
proposed plan
is a reverse stock split
where common
shareholders would get one share of the
restructured company for
every 1000 shares they
now possess.
Additionally, the
shareholders would get
one-year affirmations to purchase
more than 3.4 million
shares of new common
stock with an combined
purchase cost of $50
million. This would mean
that each share would
cost $14.60.
In order to keep current
with other casinos in
Atlantic City, the
company plans to
add a tower to its Taj
Mahal casino there.
Additional refurbishments
will take place at its
other properties. Trump
Hotels is even looking
at plans to possibly
open more casinos at
other areas as well.
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