Credit Suisse First Boston’s DLJ Merchant Banking Partners is taking a gamble with real estate and media tycoon Donald Trump, who is restructuring his debt-laden Trump Hotels & Casino Resorts.
If the deal goes through, Trump will step down as chief executive officer of publicly traded Trump Hotels and reduce his stake in the company from a controlling position to 25 percent. He will remain chairman. Trump Hotels owns, among other casinos, the Taj Mahal in Atlantic City, New Jersey.
The plan calls for an injection of $400 million in equity, $70.9 million of which will come from Trump. However, a press release notes that $55 million of the Trump equity will “be in the form of a co-investment with CSFB private equity and the remainder” will be contributed mortgage notes.
The deal will cut the company’s indebtedness by $544 million.
Trump, who recently starred as himself in the hit reality-television show, ‘The Apprentice,’ said in a statement, “I have had a wonderful long-standing working relationship with CSFB, and I am proud to be able to partner with them. I look forward to our recapitalized company being a major player in the evolving gaming industry.”
Initially, CSFB private equity would have the right to nominate five members of the recapitalised company’s board, and Mr. Trump would have the right to nominate three.