NEW ORLEANS, April 3, 1996 - Harrah's Jazz Company (HJC),
a partnership consisting of a subsidiary of Harrah's Entertainment,
Inc. (NYSE: HET), New Orleans/Louisiana Development Corporation
(NOLDC) and Grand Palais Casinos, today filed a reorganization plan
for its New Orleans land-based casino project with the federal
bankruptcy court in New Orleans. The approximately 200 page plan
and related disclosure statement proposes the following: how the
debtor partnership would be restructured; revised payments and
schedules for all creditors; lease and operating proposals for the
city of New Orleans; and the proposed size and scope of the project
for the state of Louisiana.
Highlights of the plan include the following:
State Proposal
Compensation: The Plan does not provide for any concessions
regarding the State compensation provisions mandated by the Gaming
Act. The casino operator will pay the State 25 percent of gross
gaming revenues of the temporary casino during an approximately two
year time frame while construction of a permanent casino progresses.
At the time the permanent casino is completed, no later than
December, 1998, the casino operator will pay compensation to the
State in accordance with percentages currently contained in the
Operating Contract (ranging from 19 percent to 25 percent) with a
$100 million minimum in annual payments.
Timing of Casino Construction and Opening: Under a fast tracking
development schedule, a temporary casino at the Rivergate site of
approximately 56,000 square feet of net gaming space will be ready
for use on or about January 1, 1997. A second phase of up to 42,000
square feet of net gaming space is to be completed by second quarter
1997, including special event, food service and meeting room space.
The next step will be to jointly pursue with the city the
development of the second floor of the facility which will be a non-
gaming entertainment complex. A third phase of the casino will be
completed during 1998 for a total of not less than 100,000 square
feet of net gaming space. Depending on market conditions, gaming
space could be increased to up to 130,000 square feet.
Completion Guarantee and Other Issues
Harrah's Entertainment will provide a new completion guarantee
in connection with the Plan, which guarantee will not be subject to
financing conditions upon confirmation of the Plan. The guarantee
will be supported by mutually acceptable third party guarantees
and/or collateral. In addition, as a part of an approved Plan, the
parties will exchange mutual releases for all events and claims
arising on or before confirmation of the Plan.
City Proposal
The Plan outlines resolution of terms for interim lease payments
to the city for the temporary casino site by HJC and a waiver by the
City of any requirement to reopen the temporary casino at Basin
Street. The City and HJC agree to cooperate in development of
certain areas of the second floor of the permanent casino
established as non-gaming areas, subject to state approval. The
City and HJC will negotiate in good faith on all specific issues
related to the operation of the permanent casino and to eliminate
conflict between city agreements and the state gaming act. The Plan
also proposes changes in the Open Access plan which do not change
the general intent of the program, but rather, modify and refine the
program given the practical experience HJC has had over the last 12
months.
Bondholder Proposal
The Plan contemplates that bondholders will exchange their
current $435 million of 14 1/4 percent (plus contingent interest)
First Mortgage Notes due 2001 for $187.5 million of 8 percent Senior
Subordinated Notes due 2006 with contingent payments based on a
percentage of EBITDA and Senior Subordinated Contingent Notes due
2006 on which all payments will be contingent based on a percentage
of EBITDA, and 50.1 percent of the equity of a publicly traded
holding company of the new HJC.
Unsecured Creditors Proposal
The Plan contemplates establishing a cash allocation of $8.5
million which should be sufficient to pay presently known undisputed
unsecured creditor claims in full. The Plan contemplates the
assumption of the two major construction contracts. It is
anticipated that the payments necessary to cure default will be
negotiated with the contractors. The plan also contemplates that
unsecured claims of Harrah's Entertainment of up to $40 million be
contributed as equity.
Harrah's Jazz Company Proposal
The Plan contemplates that the sponsors of the Plan will
purchase 49.9 percent of the new holding company's equity for $75
million. Harrah's Entertainment is currently in discussions with its
partners in HJC regarding this issue but has agreed that it will
fund the entire amount if NOLDC or Grand Palais do not participate.
In addition, as part of the Plan, Harrah's Entertainment has agreed
to put up $12.5 million as debtor in possession financing (of which
$2.5 million has already been funded and approximately $4.4 million
is expected to be funded), which will be credited against the $75
million.
"We believe the proposed Plan will satisfy all constituencies
and allows the project to move forward immediately with construction
and opening of the casino," said Michael D. Rose, chairman of
Harrah's Entertainment. "We do not believe any other party can
present to the court a more thorough plan based on both the
experience of operating a land-based casino in New Orleans and an
intimate understanding of the sensitivities and parameters of the
various state and local license and lease agreements. In short, we
believe no other party can credibly represent to the court a more
aggressive and reasonable schedule that will quickly return the jobs
and additional financial benefits of the casino, or a plan that
better preserves the investment of all parties."
CONTACT: Ralph Berry, Harrah's Entertainment, Inc., 901-762-8629
STUTTGART, Germany -- April 3, 1996 -- The board of
management together with the supervisory board of Daimler-Benz will
recommend at the annual general shareholders' meeting in Stuttgart
on May 22, to pay no dividend on its common stock for the business
year 1995. "This is further proof of our commitment to return to
financial strength and sustained profitability as quickly as
possible, for the sake of our shareholders and employees," said
Juergen E. Schrempp, chairman of Daimler-Benz, Europe's largest
industrial concern, after today's joint decision-making meeting of
both boards.
Since the summer of 1995, the new management board of Daimler-
Benz has taken drastic measures to improve the performance of the
group's business portfolio by eliminating loss-making businesses, re-
focusing on areas that hold profit and growth potential and
implementing further cost-cutting programs. This will result in a
one-time charge of DM 5.1 billion within the 1995 financial
statements of the group. DM 3.9 billion can be attributed to the
settling of the AEG activities and to the consequences from the
bankruptcy of Dutch aircraft manufacturer Fokker. DM 1.2 billion
has been allocated to cover additional restructuring programs and
further adjustments throughout Daimler-Benz.
The group's 1995 financial statements will show a net loss of DM
5.7 billion, according to both German accounting and the U.S.
Generally Accepted Accounting Principles (GAAP). This is an
improvement over the forecast of January 22, when Daimler-Benz
ceased financial support to Fokker and announced a net loss of DM 6
billion. This improvement can be attributed to Daimler-Benz'
business units, Mercedes-Benz and Daimler-Benz InterServices
(debis), which together represent 80% of total revenues of the
Daimler-Benz group, both reporting profitable operations for 1995.
In spite of a continuing adverse currency situation, Daimler-
Benz saw improved operating results in the second half of 1995. For
the year, the group will report an operating loss of DM 1.1 billion
(1st half of 1995; loss of DM 1.2 billion). According to Mr.
Schrempp, the board of management is confident that Daimler-Benz
will return to profitability in 1996. "The strenuous efforts of the
last few months should send a strong signal to Daimler-Benz
shareholders that we are determined to provide an attractive return
on their investment," Mr. Schrempp emphasized.
The annual balance sheet press conference will be held in
Stuttgart on April 11. Video footage of statements by Daimler-Benz
chairman Juergen Schrempp will be available upon request.
CONTACT: Daimler-Benz AG, Corporate Communications
Roland Klein, 011-49-711-17-93635
Eckhard Zanger, 011-49-711-17-93311
or
Daimler-Benz North America Corporation
Corporate Communications
Bernhard Harling, 212/909-9717