HOUSTON – (Realty News Report) – Houston restaurant and casino magnate Tilman Fertitta has borrowed $250 million at a whopping 12 percent interest rate while his business struggles with the coronavirus shutdown.
Fertitta has a cash burn-rate of $2 million a day and he said he needed liquidity for the long haul, in case the coronavirus impact continues well into 2020.
On a Fox News show last week, Fertitta was asked how he is “holding up” with his sudden misfortune and multiple woes.
Referring to the 12 percent loan, which was 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 told Fox News’ Brian Kilmeade, guest host of the Ingraham Angle show Friday night. Fertitta also injected an additional $50 million of his personal funds into the business.
As the coronavirus outbreak struck, Fertitta, owner of the Houston Rockets, laid off 45,000 employees and shuttered his entertainment organization, which includes the five Golden Nugget casinos, 600 restaurants, and a number of hotels and entertainment venues, including the Kemah Boardwalk.
“But I’ve got 45,000 employees out there that we’ve had to furlough that is so tremendously unfortunate, that we have to get back to work as soon as we can.”
On March 11, Mayor Sylvester Turner ordered the massive Houston Livestock Show and Rodeo to be closed down in-progress and soon the entire Houston Metro Area was on government lockdown.
Fertitta said that he initially believed the Houston lockdown was premature, but he now believes the local stay-at-home initiative was well-timed.
“They were 100 percent right, and we’ve got to do this to the end of this month, and we’ve got to start opening up in May, not only on the financial side, but on the mental health side is huge,’ 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.”
Houston-based Landry’s, Inc., wholly owned by Fertitta, owns Del Frisco’s Steakhouses, Willie G’s, McCormick & Schmick’s and casual dining brands including Landry’s Seafood, Bubba Gump Shrimp Co., Rainforest Cafe, Mitchell’s Fish Market Restaurants, and Saltgrass Steak House.
Fertitta is chairman of the University of Houston Board of Regents and he attended UH’s Conrad Hilton College of Hotel and Restaurant Management.