Donald Trump, who defaulted on a $47 million interest payment on bonds for his Taj Mahal casino, and a group of his bondholders Friday reached a restructuring agreement which lawyers in the deal said would involve a brief period in bankruptcy for the gaming palace.
Trump, flanked by lawyers and financial advisers in a news conference at his Plaza Hotel on Central Park South, resisted conceding the Taj Mahal would enter bankruptcy and insisted the restructuring could be achieved out of court.The missed bond payment was due at midnight Thursday.
However the restructuring is accomplished, Trump will retain 50 percent of the equity in the Atlantic City, N.J., casino while investors in the $675 million junk-bond issue will initially receive the other 50 percent of stock in the Taj Mahal.
Wilbur Ross, of the Rothschild Inc. investment bank, who played a key role in hammering out the deal in a marathon overnight bargain session, said the interest rate on the bonds would be lowered to 12 percent from the current 14 percent. Of that 12 percent, 10 percent must be paid in cash if possible or in bonds or another form.
The agreement also extended the maturity, or the date of repayment, of the bonds to the year 2000 from 1998. The $47.