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Pinnacle Entertainment Inc. Message Board

  • glennbehrman glennbehrman Jun 4, 2012 8:08 AM Flag

    Vietnam Funding Gap

    Pinnacle Entertainment Cites Funding Gap For Vietnam Casino

    Pinnacle Entertainment Inc.'s (PNK) investment in a casino resort on the Ho Tram Strip beachfront in Vietnam hit a snag on a funding gap that needs to be plugged to complete development.

    The Las Vegas-based gaming operator said in its annual filing that its joint-venture partner Asian Coast Development Ltd., or ACDL, has obtained some of the funding for the first phase of the resort. However, the company says there is a "funding gap that will require additional capital to complete such first phase."

    Pinnacle invested $95 million in ACDL last year in exchange for a 26% stake in the resort developer. The Vietnam resort is scheduled to open next year and will be developed jointly by Pinnacle and ACDL. ACDL will own the property.

    "It is uncertain whether ACDL will be able to obtain this funding or funds in a timely manner, or on acceptable terms, or at all," Pinnacle's filing said. "It is also uncertain whether the first phase of the first integrated resort will be completed or that any subsequent phases ... of the Ho Tram Strip will be developed."

    The research firm Union Gaming said in a report Friday that Pinnacle should be able to comfortably plug the financing gap if necessary, but raises questions about the value of its investment. "This suggests [Pinnacle] may either notably increase its risk profile with more capital in Vietnam or adjust the carrying value of its initial stake," the research firm said.

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