Kirk Kerkorian, MGM Mirage's largest investor, could potentially lose his grip on the company if it is forced to file for bankruptcy.
Citing sources close to the subject, the Wall Street Journal reports that US-based financier Carl Icahn, who has been linked with a bid for the Tropicana casino in Atlantic City, is believed to be pushing the operator to restructure via the bankruptcy court. Icahn and the private equity fund Oaktree Capital Management, which have acquired a significant portion of MGM’s debts, are understood to have told the operator that they would be in support of such a move.
However, according to the newspaper, Kerkorian’s 53 per cent stake in the company could be rendered worthless if a bankruptcy filing made secured debtholders a priority over those holding stock in the company.
MGM has been struggling with mounting debts and its commitments to the CityCenter project in Las Vegas. Earlier this week it announced that had received the support of its banks and had amended its senior credit facility. Under the terms of the new agreement, the company’s senior lenders have provided it with the ability to pay the full amount of current construction costs for the project due no later than today.
