News Sponsored by Go Casino
Rated 5 Stars by BestCraps.com
————————————————
Morgan Stanley did not say why, but in its regulatory filing with the US Securities and Exchange Commission, the financial services company said on Thursday it is bowing out of the Revel casino project in Atlantic City. The bank is a majority stakeholder in Revel Entertainment Group, LCC, developer of a 47-storey, 1,900-room beachfront hotel and casino on the boardwalk. The move is seen to cause the firm to suffer a major loss.
Before a downturn in the economy was experienced, Morgan Stanley was one of the largest real estate investors, but the bank’s property investments faced several hurdles when the recession befell the globe and Revel is Morgan Stanley’s last remaining large project.
The filing said the company will consider several alternatives to effect the sale which may mean a direct sale to a third party or through an auction. Information coming from reliable sources, however, revealed Morgan Stanley was already negotiating with possible buyers and the sale may take effect in the coming months. The Wall Street Bank’s decision to sell “would result in a substantial loss of that investment,” the bank stated in its regulatory filing. The firm was not clear on the specific amount of loss, but said it will be reported in its first quarter results released later this month. Analysts estimate the bank’s loss on its initial investment of $1.2 billion to be around $1 billion.
Morgan Stanley’s loss will probably be partly compensated by a $775 million gain resulting from the resolution of a lawsuit concerning the bank’s former credit card unit, Discover. Revel’s chairman and CEO Kevin DeSanctis said the casino hotel will be completed. “The key is to ultimately figure out who will end up with that equity piece, whether it’s Revel, Revel with a partner or someone else,” he said. “We’ll continue everything we’re doing, working on the financing. My total focus is on getting this project done.”
The project which started in 2007 encountered a number of problems at the onset of the economic crisis when the company ran out of money in 2009. Many workers were laid off, and work was discontinued except on the exterior of the project. Morgan Stanley, which initially agreed to provide financing, was eventually compelled to buy a majority share. New funds are expected to facilitate the completion of the project, and sources say there are ongoing talks with other financiers, including a Chinese bank.