Hard Rock joint venture attained an agreement with its lenders. To a fund in command of Brookfield Asset Management Inc., the agreement gives the joint venture’s equity stake in the Hard Rock Hotel & Casino in Las Vegas. For the property east of the Las Vegas Strip, the agreement concludes Morgans’ management contract. As a result of the agreement, gaming regulations on Morgans, which in the past, compelled compliance costs, suitability requirements on stockholders, all of these will no longer be relevant.
On about $1. 4 billion in debt, the Hard Rock Hotel & Casino has been under pressure to make payments. Morgans and DLJ Merchant Banking Partners, a private equity company affiliated with Credit Suisse are the owners of the casino-hotel. Besides the debt defaults, last year by Nevada regulators, Morgans and Credit Suisse Group AG, experienced from management dilemmas that resulted in a $650, 000 fine.
Senior vice president, communications and media with Brookfield Asset Management, Andrew Willis said that within the Las Vegas community, the Hard Rock Hotel and Casino has vital brand acknowledgment and a valuable position and they are convinced that they will be able to productively streamline this business and return it to profitability, together with Warner Gaming. Willis added that the Hard Rock is now owned by Brookfield Real Estate Finance Fund II, to operate the casino, Warner Gaming LLC of Las Vegas has been hired.
In various properties including Royalton, Delano, Clift and Sanderson, Morgans owns, runs, or has ownership interest. In afternoon trading, its stock dropped to 60 cents, or 6. 7 percent, to $8. 35. Over the past year, the shares have traded in a range of $4. 31 to $11. 46.