ATLANTIC CITY: While Donald Trump basks in the popularity of his runaway hit reality TV show, “The Apprentice,'' the auditors for his Atlantic City casino property are raising alarms over the financier's real-life debt load.
In a letter to the Trump Hotels & Casino Resorts board, auditors for Ernst & Young LLP said the debt-laden company, which runs three Atlantic City casinos, was struggling under stiff competition, recurring operating losses and had a working capital deficit as of Dec. 31, 2003.
The letter, dated earlier this year, was made public on Tuesday as part of Trump Hotels' annual report filed with regulators.
“The company is working on various alternatives to improve the company's financial resources ... Absent the successful completion of one of these alternatives, the company's operating results will increasingly become uncertain. These conditions raise substantial doubt about the company's ability to continue as a going concern,'' the auditors said.
Last month, Trump announced that Credit Suisse First Boston had agreed to make a US$400mil cash infusion into the company in exchange for a controlling stake.
Trump Hotels, which carries US$1.8bil in debt, has been unable to finance major capital improvements at its Atlantic City properties at a time when competitors – including the new Borgata Hotel Spa & Casino – have been luring away gamblers. – AP