Friday, March 20, 2009

MGM Mirage $775 Million Sale Of Treasure Island Takes Effect Today

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MGM Mirage's $775 million sale of the Las Vegas Treasure Island casino will took place today.

Treasure Island was one of MGM Mirages' profitable properties and the sale will help MGM with its cash flow difficulties. "Our balance sheet has a significant amount of debt, more than we should have for our cash flow," MGM Mirage Chief Executive Jim Murren told investors and analysts on a conference call Tuesday. Facing possible default on its bank covenants, MGM announced on Tuesday that its banks "agreed to waive debt covenants through May 15".

News of the pending Treasure Island sale to Kansas billionaire Phil Ruffin was announced in December and the Nevada Gaming Commission approved the purchase yesterday. Ruffin may receive a $20 million discount on the sale price if he pays entirely in cash by today.

Treasure Island has 2,885 rooms, 95,000 square feet of gaming space and 18,000 square feet of convention space.

The Treasure Island casino is about 700 yards from the location of his former casino, the New Frontier, which Ruffin sold for $1.2 billion in 2007. The sale of the 36-acre New Frontier property made history as the highest per acre sale price ever recorded on the Las Vegas Strip.