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PNG sells Tropicana Las Vegas property, furloughs 26,000


Penn National Gaming (PNG) has taken measures to mitigate the effect of the novel coronavirus disease (Covid-19) on its business, selling and leasing back its Tropicana Las Vegas property and furloughing around 26,000 staff members.

The operator has agreed to sell the Tropicana Las Vegas casino to its principal landlord Gaming & Leisure Properties (GLPI), real estate investment trust spun off from PNG in 2013. GLPI will then lease it back to Penn, for $337.5m in rent credits.

The deal also includes an option for Penn to acquire the operations of GLPI’s Hollywood Casino in Perryville, Maryland at a later date.

“We greatly appreciate the cooperation, creativity and partnership shown by GLPI during this challenging time,” Penn National Gaming president and chief executive Jay Snowden said.

“While this transaction will help to relieve liquidity pressure in terms of rent obligations, we are committed to taking further steps to reduce our ongoing operating expenses in order to ensure we have a healthy business to return to when we are able to re-open our doors.”

The operator has also furloughed about 26,000 workers, citing “uncertainty about the duration of the pandemic,” and the fact the operator will have “no meaningful revenue for the foreseeable future”. The business will operate with a small, “mission critical” workforce, of less than 850 employees.

“We are committed to doing all we can to help our affected team members get through this,” Snowden said. “I am proud of the fact that when the call came down from our governors across the country to temporarily close our facilities, we managed the process in a safe and orderly fashion, ensuring the health and well-being of our team members and guests.

“Since the time we suspended operations, we have taken swift measures to confront this unprecedented challenge head on and have managed to significantly reduce our daily operating expenses. While the steps we’ve taken are deeply painful on a personal and professional level, I am confident these moves will help to preserve our Company’s and our team members’ long-term future.”

Furthermore, Penn is to make “meaningful cuts” to the salaries of Snowden and other members of the company’s leadership, effective 1 April, until they are no longer deemed necessary. Penn’s board of directors have also opted to forgo any cash compensation.

Snowden said he was also proud of how his casinos have acted to help their communities.

“I’m equally proud of the fact that since closing our doors over a week ago, our properties have donated more than 45 tons of food to local food banks and homeless shelters in our communities, ensuring our perishable food items can help those in need,” Snowden said.

“In addition, our properties have donated thousands of unused masks and surgical gloves to first responders and health care providers.”

Penn has also withdrawn its earnings guidance for 2020. The operator said when it released its 2019 results on 6 February it expected earnings before interest, tax, depreciation, amortisation and restructuring (EBITDAR) of $1.67bn-$1.70bn.

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