Fertittas get majority ownership of Station Casinos

8 February 2012

LAS VEGAS, Nevada -- Station Casinos LLC minority owners Frank Fertitta III and Lorenzo Fertitta plan to buy out another shareholder for $73 million, giving the Fertitta family majority ownership of the gaming company founded by their father, Frank Fertitta Jr.

In a regulatory filing with the Securities and Exchange Commission on Monday, Station Casinos disclosed that FI Station Investor LLC, a company affiliated with the Fertittas, plans to purchase shares held by JPMorgan Chase Bank N.A.

"Frank and Lorenzo Fertitta's new investment into Station Casinos LLC demonstrates their continued commitment to the company as well as their belief in the Las Vegas locals market," company spokeswoman Lori Nelson said in a statement.

The company's capital structure is composed of four separate entities consolidated under Station Casinos.

The deal, if completed, could mean JPMorgan would lose its right to "designate a member of (Station's) board of managers."

JPMorgan appointed veteran gaming executive Stephen Greathouse to the board.

JPMorgan acquired its 15 percent ownership stake in Station Casinos last year under a deal in which its debt was converted to equity during the Station bankruptcy. JPMorgan declined to comment Tuesday.

As the company emerged from bankruptcy last year, the Fertittas owned 45 percent of Station Casinos, while Deutsche Bank AG owned 25 percent and JPMorgan and former bondholders each held 15 percent.

If the deal closes, the Fertittas could own 60 percent of Station Casinos.

Station Casinos, started as a single property called The Casino opened by the late Frank Fertitta Jr., celebrated its 35th anniversary July 1. Station Casinos filed for bankruptcy protection in July 2009 after the company had difficulty servicing more than $6 billion in debt.

Separately, Station Casinos disclosed Monday that its financial report for 2011 will show net revenue of about $1.178 billion compared with $1.14 billion in 2010.

Net revenues were expected to top $636.5 million in 2011, compared with $591.7 million last year, the privately-held gaming company said.

EBITDA was projected to be $284 million compared with $280.1 million last year, the company said. EBITDA, which is a key measure of profitability, is defined as earnings before interest taxes, depreciation and amortization.

As of Dec. 31, the company's outstanding debt was $2.5 billion.

Moody's Investors Service on Tuesday assigned a Caa2 rating to $625 million of Station's unsecured debt due in 2018. The gaming company has about $1.6 billion of unsecured debt.

In a report, Moody's said the rating on the new "unsecured notes reflects the large amount of senior ranking debt that reduces the recovery prospects for unsecured noteholders."

Moody's upgraded the company's senior secured ratings to B2 from B3. It also affirmed Station's B3 corporate rating and B3 probability of default rating.

"The stable rating outlook reflects our view that Station's EBITDA will begin to increase moderately due to the flow through of higher revenue to earnings, and that the company will apply free cash flow to permanently repay its debt," Moody's Vice President and Senior Credit Officer Peggy Holloway wrote in her report.

Holloway warned that the ratings could be lowered if monthly gaming revenues in the Las Vegas locals market begin to trend down or if Station's earnings fail to increase.

Related Links
JP Morgan Chase Bank N.A. Gaming Vendor Information
Nevada Gambling


Copyright GamingWire. All rights reserved.
Featured Vendors
.Dot-iGaming.com
Oklahoma Indian Gaming Association (OIGA) Conference
.Dot-iGaming.com
Fully loaded advanced casino platform. One time (low) fee, 100% your property, start now!
Oklahoma Indian Gaming Association (OIGA) Conference
The biggest little show in Indian gaming! Save the date: Aug 9-11, 2022 in Tulsa!
Plastic Card ID
Casino City Press
Plastic Card ID
The World’s Lowest Prices on Printed Plastic Cards and Card Printers!
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Talisman Group Creators of EZ Baccarat
Casino Network
Talisman Group Creators of EZ Baccarat
With over 800 tables in 150+ casinos, EZ Baccarat is the number one brand in baccarat.
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Imagine This
AmericanChecked
Imagine This
Imagine This #1 Source for Player Gifts. Over $50 million in stock ready to ship! Let us serve you!
AmericanChecked
Background checks for the gaming industry with key & non-key packages & fingerprinting solutions
Slot Machines Unlimited
Broadband Hospitality
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Broadband Hospitality
Improve these critical guest-facing amenities: In-room TV, Wi-Fi, Mobile App. Priced right. All here
TOP ONE TECH LIMITED
Rymax Marketing Services, Inc.
TOP ONE TECH LIMITED
GLOBAL TOUCH SOLUTION PARTNER OF CHOICE,10+ years OEM manufacturing,100+ thousand units application
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Global Gaming Expo (G2E)
Sunkist Graphics, Inc.
Global Gaming Expo (G2E)
The largest gathering of global, commercial and tribal gaming professionals in North America.
Sunkist Graphics, Inc.
Specializing in the creation of best-of-breed gaming graphics - slot glass, sign faces, and more
Casino Schedule Ease
TDN Money Systems
Casino Schedule Ease
Get a 90-Day Free Trial of 100% contactless, customizable table game & full casino scheduling
TDN Money Systems
Cage, cash/chip handling experts representing CountR, ARCA, AccuCASH, Fujitsu & NCR
Kallop
Betson Imperial Parts & Service
Kallop
Reward every play like a VIP with exclusive luxury brands at affordable prices.
Betson Imperial Parts & Service
Your one stop shop for all your gaming and OEM needs!


Your Guide to 15,355 Gaming Industry Suppliers