Life is not easy for anyone, especially during a time when a pandemic is taking over the world. And one such person who is finding things melting around him is a business magnate and Houston Rockets owner Tilman Fertitta.
The billionaire is looking for loan investors for around $250 million. He is offering 15% interest rates on the loan which will help him run his non-Rockets business smoothly.
His chain of casinos and restaurants including the Landry’s have been shut down since early March due to the ongoing coronavirus pandemic. Fertitta told CNBC in March that his restaurants are losing as much as $1 million a day. The inflow of cash has not been regular for the business tycoon this year.
A heavy hit to all his conglomerates is why he is looking for an incremental debt that will be attached to an existing loan deal.
Fertitta is offering lenders some hefty concessions in exchange for their participation in a loan. He is doing this for the sake of shoring up his businesses.
Landry’s Inc. which operates in more than 35 states around the United States is all part of Fertitta’s business.
Jefferies Financial Group, Inc. is a long-standing lender to the Houston Rockets owner. They are currently seeking people to participate in this program which will mature by 2023. By that time it will eventually mean that Fertitta would be owing $2.5 billion dollars in debt.
He calls this “an expensive insurance policy in the event that none of these businesses can reopen before the end of the year.”
“The company has already drawn $300 million of existing credit lines in full and Fertitta is injecting $50 million of his own cash into the business, said one of the people, who asked not to be named because the details are confidential”, report Bloomberg’s Davide Scigliuzzo and Jeannine Amodeo.
Fertitta also admitted that he had to furlough roughly 40,000 employees in the wake of the COVID-19 pandemic.
Since March 11, the Rockets haven’t played a single game due to the NBA being suspended. Though there has been no clarity on the part of the Houston Rockets, the team’s total salary for the 2020-21 season roughly estimates over $130 million. Fertitta has remained calm about the situation and expects to bounce back of it once the coronavirus situation curtails.
The Rockets stand sixth in the Western Conference table and have recorded 40 victories so far. To date, there have been talks that the NBA wants the players to take a 50% pay cut while the games are on hold. The pay cut will come into effect on the 15th of April, which is the next standard NBA payday. The players are bound to be put under some amount of pay cut, which will be finalized soon.