Trumped up

1 April 2004 By Rob Cox Follow @rob1cox

A hit US reality TV show has made the New York real estate developer one of the country’s most admired businessmen. Yet judging by the health of his listed hotels and casino group, it would be tragic if Trump became a role model for US business.

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Ernst & Young on Tuesday said Trump Hotels & Casinos Resorts, in which New York real estate developer Donald Trump is the largest shareholder, is at risk of collapse without an infusion of new money.

"The company has experienced increased competition, has incurred recurring operating losses and has a working capital deficit at December 31, 2003," Ernst & Young auditors wrote in a letter to the board of directors that was included in the company's filing of 2003 accounts with the Securities and Exchange Commission.

Trump Hotels has $1.8bn of debt. Last year it reported operating income of $139m compared to interest payments of $227m. Trump has said in the past that the company was discussing an infusion of up to $400m of new cash from a private equity arm of Credit Suisse First Boston that would give the investment bank control of the group.

"Absent the successful completion of one of these alternatives, the Company's operating results will increasingly become uncertain. These conditions raise substantial doubt about the Company's ability to continue as a going concern," Ernst & Young wrote.

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