Myriad Entertainment & Resorts, Inc.(fka MYRA)

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MYRA news in the local Business Journal.

http://www.memphisdailynews.com/editorial/Article.aspx?id=36599

Myriad Resort Needs $70M or Bust
ANDY MEEK | The Daily News

RUNNING ON EMPTY: Myriad Entertainment & Resorts Inc. needs about $70 million this year to fund its day-to-day operations and to pay its debt obligations as it works to create a casino and resort project in Tunica County. -- Photo Courtesy Of Getty Images
The effort to develop a sprawling entertainment and casino-based resort in Tunica County, a project that's unfolded in fits and starts since 2004, has come down to a $70 million gamble.

The amount of cash it will take for Myriad Entertainment & Resorts Inc. to fund its day-to-day operations through 2008 and to pay its debt obligations related to the new Tunica development is about $70 million. That's according to a recent regulatory filing with the U.S. Securities and Exchange Commission.

That reality puts Myriad in a delicate spot. Details of its Tunica resort first were unveiled in 2004, long before credit markets began choking on fumes from the subprime mortgage meltdown. Since then, the company's business plan has depended largely on debt and equity financing to sustain the project, something that may be harder to rely on now.

Game of chance
With plans that call for up to six new casinos, restaurants, a spa, a water park, convention center and more, the Myriad resort was conceived by Canadian businessman Scott Hawrelechko as a veritable paradise for gamblers and general tourists alike. And the effort to develop it remains alive.

Several principals of the company were in the Tunica area last week for a round of meetings. But whether it was a discussion topic at those encounters, the company's latest financial statements don't look promising.

That's also the opinion of Myriad's independent auditor, who appears to believe it's getting close to make-or-break time for the high-dollar, 540-acre resort.

"Our independent auditor has indicated that in its report on our 2007 financial statements, our recurring losses from operations and our difficulties in generating sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern," Myriad's recent SEC filing states.

Lady Luck elusive
As of Dec. 31, Myriad had a working capital deficit of almost $7.3 million. In a further blow, Myriad announced last month that CEO John Meeske has been fired for unspecified reasons. Meeske had served in the position for almost two years.

The termination was based on actions by the former CEO that were "inconsistent with his employment agreement, company policies and procedures," according to Myriad, which is still investigating the matter.

The company does not expect to begin replenishing its coffers with revenue from the resort until construction is complete. From Dec. 31, 2006, through the end of 2007, the company's budget deficit essentially doubled, climbing from about $3.7 million to almost $7.3 million. Myriad had less than $20,000 in the bank as of Dec. 31.

A company spokesman could not be reached for comment.

"As of now, I have not heard anything officially from Myriad," said Webster Franklin, president and CEO of the Tunica Convention & Visitors Bureau. "I understand that several of their principals were in town last week for meetings, but (I) do not know the outcome."

Accounts receivable
At the moment, the company's precarious financial position doesn't appear to have hobbled its short-term and long-term borrowing plans. Myriad's board of directors has approved terms of a financing arrangement that will provide up to $675 million in funding for the first phase of the resort.

That arrangement also provides funding of up to $2.5 billion for the rest of the project. The company announced last month it had agreed to those financing terms.

Yet that doesn't appear to have put Myriad in the clear.

The recent SEC filing cautions investors that a substantial amount of financing still is needed. And "no assurance can be given that debt or equity financing, if and when required, will be available," according to Myriad.

At the moment, Myriad executives still have visions of high-rollers betting big on the resort's casino floors, tourists filling its hotel rooms and big-name entertainers performing in its arena space, among other things.

Accounts payable
As it's now conceived, the project would almost double the number of casinos in Tunica in one fell swoop.

Most of Tunica's nine existing casino properties are at least 10 to 12 years old. Myriad's plans call for up to six new casinos.

Among other items they're pursuing, Myriad's backers also are continuing to look for signature golf course architects and builders to help bring to fruition a golf course that's been conceived as part of the resort.

The company also anticipates working with a major mall company to tie various pieces of the project together, including the retail, restaurant and casino aspects.