SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 16, 1999
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ALADDIN GAMING HOLDINGS, LLC
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(Exact name of Registrant as specified in charter)
Nevada
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(State or other jurisdiction of incorporation)
333-49717 88-0379607
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(Commission File Number) (IRS Employee Identification No.)
831 Pilot Road, Las Vegas, Nevada 89119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 736-7114
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Not Applicable
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(Former name or former address, if changed since last report)
ALADDIN CAPITAL CORP.
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(Exact name of Registrant as specified in charter)
Nevada
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(State or other jurisdiction of incorporation)
333-49717-01 88-0379606
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(Commission File Number) (IRS Employee Identification No.)
831 Pilot Road, Las Vegas, Nevada 89119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 736-7114
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Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
On April 16, 1999, Aladdin Gaming Holdings, LLC ("Company") was informed
that the various lenders and The Bank of Nova Scotia, as the administrative
agent for the lenders, (collectively, "Lenders") had approved the Second
Amendment to the Credit Agreement among Aladdin Gaming, LLC ("Gaming") and
the Lenders. As discussed below, the Second Amendment to the Credit Agreement
waived or cured certain events of default which existed under the Credit
Agreement and were discussed in the Company's Form 10-K for the year ended
December 31, 1998 ("1998 10-K").
In March 1999, the Company completed its review of the Main Project
Budget and determined it was appropriate to increase the Main Project Budget
by approximately $18.5 million, which amount reflected an increase in
construction costs of approximately $9.5 million and an increase in
pre-opening costs of approximately $9.0 million. On April 2, 1999, pursuant
to the Guaranty of Performance and Completion ("Completion Guaranty"), which
is a joint and several obligation of the Sommer Trust and London Clubs
International, plc ("London Clubs"), London Clubs funded to Gaming the
approximately $18.5 million in order to bring the Main Project Budget "In
Balance" (as defined in the Credit Agreement) and the Lenders funded Gaming's
March 1999 funding draw ("March Draw") under the Credit Agreement. Upon
receipt of the March Draw, on April 2, 1999, Gaming immediately paid the
outstanding March 1999 payment to Fluor Daniel, Inc., the design/builder
("Design/Builder") of the Aladdin Hotel and Casino ("Project"). The delay in
payment to the Design/Builder did not effect or delay the Project's
construction.
On April 5, 1999, effective as of March 10, 1999, the Sommer Trust,
London Clubs, Aladdin Bazaar Holdings, LLC ("ABH") and The Bank of Nova
Scotia, as administrative agent for the Lenders, entered into the First
Amendment to the Completion Guaranty, which requires the Sommer Trust, London
Clubs and ABH to guarantee Gaming's minimum Net Worth as required by the
Second Amendment to the Credit Agreement, which is discussed below.
As reported in the 1998 10-K there existed certain events of default
under the Credit Agreement. Specifically, (a) the incurrence of indebtedness
in connection with the Aladdin Music Project, which indebtedness was
contemplated by the Credit Agreement, but was not pre-approved by the Lenders
("Music Indebtedness") and (b) not securing certain amendments to Gaming's
furniture, fixtures and equipment financing ("FF&E Financing") documents. In
addition, the issuance of the Company's annual financial statements with an
"Impermissible Qualification" (as defined in the Credit Agreement), unless
cured within thirty days, would have also been an event of default under the
Credit Agreement.
The Lenders have approved, effective as of March 10, 1999, the
Second Amendment to the Credit Agreement ("Second Amendment to the Credit
Agreement"), which cured or waived the events of default arising from the
Music Indebtedness and the requirement to amend the FF&E Financing documents.
Specifically, the Second Amendment to the Credit Agreement provides or
acknowledges: (i) the Music Indebtedness has been paid by or on behalf of
Aladdin Music and this event of default has now been waived by the Lenders;
(ii) a capital contribution in the amount of approximately $18.5 million has
been made to bring the Main Project Budget "In Balance"; (iii) the
approximately $6.5 million of letters of credit, which had been previously
posted by London Clubs and the Sommer Trust to fund a prior increase in the
Main Project Budget (and resulting imbalance), have been drawn and the
proceeds deposited in Gaming's guaranty deposit account; (iv) amending
certain definitions in the Credit Agreement, including, "Available Funds,"
"Indebtedness," and "Realized Savings"; (v) any costs in excess of $36
million for completing the carpark associated with the Project will be funded
by the Sommer Trust and London Clubs; (vi) Gaming will be required to
maintain a minimum "Net Worth" at the close of each calendar month, until the
end of the fiscal quarter during which the Project opens (and then reverting
to the Credit Agreement's requirement to maintain the minimum Net Worth on a
fiscal quarterly basis thereafter), of not less than $100 million plus 85% of
positive Net Income (as defined in the Credit Agreement); and (vii) for other
technical amendments to the Credit Agreement. The above summary should be
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read in conjunction with, and is qualified in its entirety by, the Second
Amendment to the Credit Agreement which is an exhibit to this Form 8-K and
incorporated herein by this reference. The Company has been advised by its
counsel that the Second Amendment to the Credit Agreement did not require the
approval of either the FF&E Financing lenders or the holders of the Company's
13 1/2% Senior Discount Notes due 2010.
As required by the Company's Operating Agreement upon advances under
the Completion Guaranty, the Company will issue, effective the dates of the
respective fundings, Series A Preferred Shares in the names of Sommer
Enterprises, LLC and London Clubs Nevada, Inc. in the amounts specified in
the Company's Operating Agreement. All said shares have been pledged in favor
of the Lenders, and, on a subordinated basis, the shares issued in the name
of Sommer Enterprises, LLC (as well as its common shares) have been pledged
in favor of London Clubs.
On April 27, 1999, Arthur Andersen LLP, the Company's independent
public accountants, reissued its report in connection with its audit of the
Company's annual financial statements ("Reissued Auditor Opinion"). The
Reissued Auditor Opinion now contains an unqualified opinion. Further, the
Company has revised its 1998 year end financial statements by decreasing
Current Maturities of Long-term Debt and reclassifying it as Long-term Debt,
net of discount. The Reissued Auditor Opinion and the Company's consolidated
financial statements, with accompanying notes, is attached hereto as an
exhibit to this Form 8-K.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
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10.01 Second Amendment to Credit Agreement, dated as of
April 5, 1999, effective March 10, 1999, among Aladdin
Gaming, LLC, Various Financial Institutions, the Bank
of Nova Scotia, Merrill Lynch Capital Corporation and
CIBC Oppenheimer Corp.
10.02 First Amendment to Guaranty of Performance and
Completion, dated as of April 5, 1999, effective March
10, 1999, by London Clubs International, plc, the
Trust Under Article Sixth Under the Will of Sigmund
Sommer, Aladdin Bazaar Holdings, LLC and the Bank of
Nova Scotia.
99.01 Report of the Independent Public Accountants and
Consolidated Financial Statements of Aladdin Gaming
Holdings, LLC and its subsidiaries and accompanying
notes thereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ALADDIN GAMING HOLDINGS, LLC
(Registrant)
Dated: April 27, 1999 By: /s/ Cornelius T. Klerk
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Cornelius T. Klerk
Senior Vice President and
Chief Financial Officer
ALADDIN CAPITAL CORPORATION
(Registrant)
Dated: April 27, 1999 By: /s/ Cornelius T. Klerk
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Cornelius T. Klerk
Senior Vice President and
Chief Financial Officer
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