Bally’s warns of debt covenant breach, going concern risk

Bally’s Corp has warned investors there is 'substantial doubt' it can continue as a going concern, as the casino operator risks breaching its debt covenants with lenders. The Rhode Island-based company said in a regulatory filing that it does not expect to satisfy lender requirements on liquidity or its debt leverage ratio based on current forecasts.

Bally’s is pursuing alternatives including asset or equity sales and debt financing. It executed a non-binding term sheet last month for a loan to fund its Bronx, New York project, but has not yet closed the financing. The company has already invested over $800 million in the project. Bally’s, controlled by Standard General, reported a 21% rise in second-quarter revenue to $792 million.