What do you mean tidy profit??? are you on drugs?
Onex Corporation has been dealt a cold deck for its big Las Vegas bet as the economic landscape in the casino mecca continues to sputter.
The private equity firm sold its stake in the storied Tropicana Las Vegas Hotel and Casino in the heart of the Las Vegas strip in late April to Penn National Gaming after holding out hope that its renovation efforts would pay off.
“We tried to protect ourselves on the downside and we paid a big price,” said Gerald Schwartz, Chief Executive Officer of Onex Corporation on an earnings call to investors.
And what about Onex’s bet on a recovery of the Las Vegas tourism scene?
“Gaming and resort revenues have not rebounded in Las Vegas as we had hoped.”
Schwartz does not see a recovery from the 2008 recession happening anytime soon.
“Las Vegas has not turned around and the new room supply did not help the situation. We wanted to build a casino network,” said Schwartz on the call.
A group led by Onex paid $330 million for the Tropicana in March 2007 and spent more than $200 million to refurbish the entire hotel. Penn National paid a total of $50 million for the Tropicana.