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LAS VEGAS-The beginning of July marked a new beginning for one of the oldest and best-known casinos in the US. The private equity firm Onex Corp. acquired a majority equity stake in the Tropicana Las Vegas Hotel and Casino following the property’s emergence from bankruptcy protection on July 1 and promised that no less than US$75 million would be spent upgrading the 34-acre resort.

The Tropicana consists of 1,850 guestrooms, a five-acre pool area, a 61,000-square-foot casino, multiple restaurants and an 850-seat showroom. Plans for the “comprehensive renovation” include refurbished guestrooms, a new casino floor, an enhanced pool area, and new dining, nightclub and entertainment options.The improvements are expected to be completed sometime in 2010.

Alex Yemenidjian, former President of MGM Mirage and Onex’ partner in the gaming sector, has been appointed Chairman and Chief Executive Officer of Tropicana Las Vegas. Onex and Yemenidjian established a gaming partnership in 2008 to pursue opportunities in the out-of-favor gaming sector. Tropicana is the first acquisition resulting from the partnership and the first acquistion by Onex’s third large-cap private equity fund, Onex Partners III.

Onex began accumulating the senior secured debt of Tropicana Las Vegas in 2008 and ultimately acquired more than 50% of the security. In May 2009, the plan of reorganization was confirmed and subsequent to Alex Yemenidjian’s gaming license approval on June 18, 2009, Onex had satisfied all conditions for the plan of reorganization to become effective.

As a result, on July 1, all secured debt holders, of which Onex was the largest, were given 100% of the equity in the resort property, which begins its new life with no debt, approximately US$10 million of cash, and commitments from Onex and certain other equity holders to invest at least US$75 million of capital to upgrade the property.

Publicly traded on the Toronto Stock Exchange, Onex is an equity firm with approximately US$10 billion under management. The company generates annual management fee income and is entitled to a carried interest on approximately US$7 billion of third-party capital, and also invests its own capital directly and as a substantial limited partner in its Funds. The company’s businesses generate annual revenues of $37 billion, have assets of $44 billion and employ 225,000 people worldwide.

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