Tilman Fertitta Borrows $250M at 12% After Laying Off 45,000; $2M Daily Cash Burn
Tilman Fertitta
HOUSTON – (Realty News Report) – Houston restaurateur and casino owner Tilman Fertitta has secured a $250 million loan carrying a 12 percent interest rate as his businesses cope with disruptions from the coronavirus pandemic.
Fertitta said his operations are burning through roughly $2 million a day and he sought additional liquidity to prepare for a prolonged period of reduced revenue if the pandemic’s effects continue into the rest of 2020.
Speaking on a Fox News program last week, Fertitta was asked how he was managing amid the sudden financial strain and widespread business closures.
Discussing the 12 percent financing arranged by Jefferies Financial Group, he said: “We have to have the insurance. None of us have an idea how long this is going to last.” Fertitta also said he invested an additional $50 million of his own money into the business to bolster liquidity.
When the coronavirus outbreak accelerated, Fertitta, who owns the Houston Rockets, furloughed about 45,000 workers and temporarily closed his entertainment operations. His company oversees five Golden Nugget casinos, roughly 600 restaurants, and several hotels and venues, including the Kemah Boardwalk.
“But I’ve got 45,000 employees out there that we’ve had to furlough, which is tremendously unfortunate. We have to get back to work as soon as we can,” he said.
On March 11, Mayor Sylvester Turner ordered the Houston Livestock Show and Rodeo to shut down while already in progress, and the broader Houston metropolitan area soon entered a government-mandated lockdown.
Fertitta said he initially thought the local restrictions were premature, but has since concluded the timing was appropriate.
“They were 100 percent right, and we’ve got to do this through the end of this month, and we’ve got to start opening up in May—not only for the financial side, but because mental health is a huge factor,” Fertitta said. “I talk to so many people who say, ‘I just need to get back to work, I’ll do anything, I just need to get out of my house.’”
Landry’s, Inc., the Houston-based company wholly owned by Fertitta, operates a wide portfolio of dining and hospitality brands. Those include Del Frisco’s Steakhouses, Willie G’s, McCormick & Schmick’s, Landry’s Seafood, Bubba Gump Shrimp Co., Rainforest Cafe, Mitchell’s Fish Market, and Saltgrass Steak House.
Fertitta serves as chairman of the University of Houston Board of Regents and is an alumnus of UH’s Conrad N. Hilton College of Hotel and Restaurant Management.
