Equity-for-debt

The owners of the Eldorado casino properties are moving toward completion of a deal to give up a 17 percent interest in the company in exchange for elimination of $38 million in debt.

The complex transaction, detailed in a filing with the Securities and Exchange Commission last week, would remove debt that the Eldorado took on to purchase control of a casino at Shreveport, La., two years ago.

The debt is held by Newport Global Advisors of The Woodlands, Texas, a unit of Providence Equity Partners, a firm headquartered in Rhode Island.

Once the equity-for-debt transaction is completed, probably later this year, the family of Eldorado founder and Chief Executive Officer Donald Carano will continue to own a 51 percent interest in Eldorado Resorts LLC.

Thomas Reeg, the senior managing director of Newport Global Advisors, will have a seat on the company's board of managers once the swap is completed.

Executives of the Eldorado, noting that the transaction requires approval of gaming authorities in Nevada and Louisiana, declined to comment last week.

Along with the Eldorado Hotel and Casino, the company owns a half interest in the Silver Legacy, a 76 percent interest in the Eldorado Shreveport Hotel and Casino and a 21 percent interest in Tamarack Junction in south Reno.

The SEC filings show that Eldorado Resorts, the parent company, earned $7 million on revenues of $281.1 million during 2006. A year earlier, the company lost $2.2 million on net revenues of $191 million.

In the first half of this year, the company earned $1.3 million on revenues of $140.1 million.

The company is among the biggest employers in the Reno area. The Eldorado, according to the SEC filing, employs approximately 1,880. The Silver Legacy employs 2,260.

The 815-room Eldorado opened in 1973. The 1,710-room Silver Legacy opened in 1995.