Restructuring will leave Maloof with 2 percent ownership in Palms
The Maloof family’s ownership in the Palms Casino will drop to just 2 percent once a restructuring of the resort’s debt is finalized.
The Sacramento Bee reported the ownership decrease based on documents filed with the Nevada Gaming Control Board. A gaming source confirmed the ownership structure to the Las Vegas Review-Journal on Saturday.
Once state gaming regulators approve the restructuring of about $400 million in debt, the Maloofs will own just 2 percent of the 1,300-room off-Strip hotel-casino. Previously, the family’s ownership stake was about 85 percent.
The casino’s creditors, investment firms TPG Capital and Leonard Green & Partners, will each own 49 percent after the restructuring.
In an interview with the Review-Journal this week after the restructuring was announced, Maloof, who will remain as president of the Palms, said the transaction would allow the company to make improvements to the hotel-casino.
Maloof told the Sacramento Bee the family’s stake is expected to grow. TPG and Leonard Green granted the Maloofs a series of options and warrants – contracts giving them the right to buy additional equity.
"We could own up to 20 percent when it’s all said and done," he said.
The newspaper is following the Palms’ matter because of the Maloof family’s ownership in the NBA’s Sacramento Kings. The Maloofs attempted to move the team to Anaheim in recent months, but said recently they are committed to turning the Kings’ fortunes around. The team had the NBA’s lowest payroll last season.
Sacramento leaders and the NBA also expect the Maloofs to contribute financially in some way to construction of a new arena.
The Maloofs’ stake in the Palms has direct relevance to its stewardship of the Kings. While the two are operated as separate companies, the Maloofs’ overall financial health affects how much money the family can plow into the Kings as the team enters a crucial offseason.
