"In New Orleans, we are preparing to commence construction of a $20 million, 150-room hotel, with ground breaking targeted this month. We expect the hotel to open in the first half of 2014."
ACDL continues to make significant progress constructing Phase A1 of MGM Grand Ho Tram Beach, with the hotel, casino and resort elements of the project substantially complete. In addition, construction has commenced on the second hotel tower of the MGM Grand Ho Tram Beach and continued progress has been made on construction of the 18-hole Greg Norman designed golf course.
As previously disclosed, ACDL advised the Company in November 2012 that certain issues had arisen with respect to the funding of Phase A1 for MGM Grand Ho Tram Beach. ACDL is reliant upon a $175 million credit facility from a syndicate of Vietnamese banks to fund this first phase of the first resort of its Ho Tram Strip resort project. The banks have suspended funding under the credit facility until the amendment to the investment certificate, now pending before the Vietnamese Government, has been granted. ACDL is currently preparing the resort for operations. However, the opening of the resort for operations is subject to receiving an amended investment certificate, the resumption of funding by its lenders, a working capital facility, and depending on the length of the delay, additional capital to fund interim operations.
ACDL completed an additional $30 million capital raise in December, in which the Company did not participate. As a result, the Company's equity stake in ACDL is approximately 24%, assuming conversion of all preferred stock, exercise of all warrants and exercise of certain options. The Company retained an option to invest its pro-rata share of the $30 million capital raise, which would offset the dilution it incurred if exercised.ACDL has been expecting to open the first phase of the MGM Grand Ho Tram in the first quarter of 2013. While the application for the amendment is progressing through the government review and approval process, it is taking longer than expected. While it may be possible to open the facility in the first quarter, the amendment of the investment certificate has not been completed as of the date of this release. In accordance with GAAP, and in consideration of the uncertainty surrounding the timing of the amendment of the investment certificate, related risks associated with such amendment, reinstatement of funding under ACDL's current credit facility, the subsequent working capital financing needs, the Company recorded a non-cash write down of the carrying value of its investment in ACDL of approximately $25 million. Should the delay in obtaining the amendment and the resumption of funding by ACDL's lenders continue for a prolonged period of time, additional write-downs of the Company's investment in ACDL may be required.
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