Onex Corporation
TSX : OCX

Onex Corporation

July 02, 2009 08:30 ET

Onex Acquires Control of the Tropicana Las Vegas Hotel and Casino

Legendary Property to be Restored to Glory

TORONTO, ONTARIO--(Marketwire - July 2, 2009) - Onex Corporation (TSX:OCX) today announced that it has, together with Alex Yemenidjian, acquired a majority equity stake in the Tropicana Las Vegas Hotel and Casino following the property's emergence from bankruptcy protection on July 1, 2009. Under the terms of the plan of reorganization, all secured debt holders, of which Onex was the largest, received 100% of the equity in the resort property. Effective immediately, Mr. Yemenidjian, former President of MGM Mirage and Onex' partner in the gaming sector, has been appointed Chairman and Chief Executive Officer of Tropicana Las Vegas.

Located on 34 acres at one of the busiest intersections in the world, the Tropicana Las Vegas is one of the oldest and best-known casinos in the United States. The property has more than 1,850 guestrooms, a 61,000 square-foot casino, multiple restaurants, an 850-seat showroom and a signature five-acre tropical pool area.

Tim Duncanson, Managing Director at Onex, said, "We're very excited about partnering with Alex to rejuvenate the Tropicana Las Vegas. We believe this casino resort has tremendous potential and, with Alex's extraordinary talents, will become a strong competitor on the Las Vegas Strip."

The Tropicana Las Vegas emerges from bankruptcy with no debt, over US$10 million of cash, and commitments from Onex and certain other equity holders to invest at least US$75 million of capital to upgrade the property.

"I am delighted to have the opportunity to partner with Onex on returning such a storied property to its former glory," commented Mr. Yemenidjian. "With 25 years of active ownership experience, significant resources and business acumen, Onex is the ideal partner to transform the Tropicana Las Vegas."

A comprehensive renovation of the property is expected to commence later this year and will include refurbishing the resort's guestrooms, a new casino floor featuring all of the most in-demand slot machines and table games, an array of exciting dining experiences, and enhanced hotel amenities including the pool and spa facilities. Additionally, Onex and Mr. Yemenidjian plan to reinvigorate the Tropicana Las Vegas with new entertainment, convention and banquet activity as well as a new nightclub. The renovation of the property is expected to be finished in 2010.

Background

In 2008, Onex established a gaming partnership with Alex Yemenidjian to pursue opportunities in the currently out-of-favour gaming sector. The Tropicana Las Vegas - a distressed-for-control opportunity - is the first acquisition resulting from this partnership and the first investment by Onex Partners III, Onex' third large-cap private equity fund. Onex began accumulating the senior secured debt of Tropicana Las Vegas in 2008 and ultimately acquired more than 50% of the security. In May 2009, the plan of reorganization was confirmed and subsequent to Alex Yemenidjian's gaming license approval on June 18, 2009 had satisfied all conditions for the plan of reorganization to become effective. Subject to approval by the Nevada Gaming Commission, Onex also expects to receive its gaming license in Nevada.

About Onex

Onex is one of North America's oldest and most successful private equity firms. Onex makes private equity investments through the Onex Partners and ONCAP families of Funds. Onex also manages investment platforms focused on real estate and credit securities. In total, the Company manages approximately US$10 billion. Onex generates annual management fee income and is entitled to a carried interest on approximately US$7 billion of third-party capital, and also invests its own capital directly and as a substantial limited partner in its Funds.

Onex' businesses generate annual revenues of $37 billion, have assets of $44 billion and employ 225,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. For more information on Onex, visit its website at www.onex.com. The Company's security filings can also be accessed at www.sedar.com.

About Alex Yemenidjian

Alex Yemenidjian has a long and successful career in the gaming and entertainment sector and served as Chairman of the Board and CEO of Metro-Goldwyn-Mayer Inc. from April 1999 to April 2005, and was a director from November 1997 to April 2005.

Mr. Yemenidjian also served as President of MGM MIRAGE (formerly MGM Grand, Inc.) from July 1995 through December 1999. Mr. Yemenidjian was a director of MGM MIRAGE from 1990 to 2005. He also served MGM MIRAGE in other capacities during this period, including as Chief Operating Officer from June 1995 until April 1999 and as Chief Financial Officer from May 1994 to January 1998. While at MGM MIRAGE, Mr. Yemenidjian was involved with the design and development of MGM Grand (Las Vegas), New York - New York, and MGM Grand (Detroit). In addition, Mr. Yemenidjian served as an executive of Tracinda Corporation, the majority owner of both Metro-Goldwyn-Mayer Inc. and MGM MIRAGE, from January 1990 to January 1997 and from February 1999 to April 1999. Prior to 1990, Mr. Yemenidjian was the Managing Partner of Parks, Palmer, Turner & Yemenidjian, Certified Public Accountants.

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

Contact Information

  • Onex Corporation
    Timothy Duncanson
    Managing Director
    416-362-7711
    or
    Onex Corporation
    Michael Locke
    Director, Investor Relations
    416-362-7711