Tuesday, February 17, 2009

Oh Dear What Can The Matter Be? Trumptown Latest.

Back in November 2008 the man who runs Billionaire Donald Trump's Scottish operation said that he had a billion £. "The money is there, ready to be wired at any time. I am not discussing where it is, whether it is in a Scottish bank or what, but it is earmarked for this project. If we needed to put the development up tomorrow, we have the cash to do that. It is sitting there in the bank and is ready to go."

Well there's news this morning that might make that a little more difficult to believe. According to Reuters. "Trump Entertainment Resorts Inc , Donald Trump's casino group, is expected to file Tuesday for bankruptcy, The Wall Street Journal reported. The company's board was scheduled to meet late Monday night to decide whether to authorize the filing, the newspaper reported in its online edition. Otherwise, the casino operator would be forced into bankruptcy involuntarily by creditors, the newspaper said."

Unfortunately the timing of this little financial worry could not be worse. The Donald is about to start a new season of the Apprentice on American TV. Perhaps he'll fire himself? Oh he already has...

Because the Donald is no longer at the helm of his troubled casino operator – at the weekend he resigned. The resignation followed weeks of negotiations with bondholders to restructure debt. Apparently Trump could not come to terms with the company’s creditors in seeking to refinance $1.25 billion in debt owed by Trump Entertainment. He said bondholders would neither sell the company to him nor accept his offers to repay existing debt. “I strongly disagree with the bondholders’ decisions and actions. Part of the reason that these bondholders can’t make a deal is… they’ve lost so much money on this deal, and they’re probably going to lose so much money on other deals, that my impression is they don’t care.”

Trump who controls over a quarter of the company's stock has seen the value of his shares crash to around 25 cents each from $4 a year ago. Will this make him a nearly billionaire?

Bloomberg are reporting that Trump’s exit from the gaming company may endanger the sale of the Trump Marina Casino to Coastal Marina, a deal already entangled in financing problems. Trump Marina’s price had been lowered to $270 million, still quite a bit of cash for the cash-starved company.

Of course this is not the first time. Back in the early 1990s he almost went to the wall when his Atlantic City casino, it too cost a billion (do all his developments cost a billion?) and was built with money from high-interest junk bonds ran into trouble. Such was the level of debt servicing that was required that it ate through most of his companies cash and almost finished him. Trump had to file for bankruptcy protection.

Meanwhile according to the Herald this morning. Gordon Dewar, the secretary of the Scottish PGA, last night revealed that he had made an audacious bid to lure Donald Trump, the US tycoon, to the Tartan Tour as a sponsor for the Northern Open. The 72-hole championship, one of the oldest professional events in Scotland, will still go ahead in May despite losing the financial backing of the anonymous benefactor who has bankrolled the 78-year-old tournament for the past four years.

"We have a number of sponsorship options that we are working on but we thought it was worth giving the Trump idea a go," admitted Dewar after receiving news that his bold move had failed.
It was a case of nothing ventured, nothing gained and we did receive a response thanking us for our inquiry but that nothing would materialise."

So where does this leave the development of the greatest golf course in the world? Naturally complex corporate financial arrangements are at play and the Donald's golf and construction empire will be totally divorced from his gambling empire. But, who would still like to bet on there being a billion in the bank just ready and waiting to finance the Menie project? It's all pretty hair-raising


Anonymous said...

I wonder if "The Donald" has any understanding of the German word "Schadenfreude".

Because every reader here understands what this word means.

Goodbye, The Donald.

Anonymous said...

The recession isn't all bad then.......

sexy said...
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