London Clubs International announced Friday it has finally reached a deal extricating it from its financial obligations to the bankrupt Aladdin hotel-casino on the Strip.

The Aladdin’s Sept. 28 bankruptcy filing triggered an immediate “keep-well” payment of $150 million, due from LCI and the Sommer Trust — the Aladdin’s equity owners. LCI, pushed to the financial brink by losses from the Aladdin, had been unable to make the payment, and immediately began negotiations with its bankers to be released from the payment.


LCI had estimated its share of the payment was $37.5 million.


On Friday LCI announced it had reached a deal. In exchange for the release, LCI agreed to issue warrants to the banks giving them the right to acquire a 5 percent stake in LCI, the Times of London reported. The warrants only become effective if LCI moves above 50 pence per share.


LCI must also make a payment of 10.5 million pounds ($15 million) to the banks in seven years, the Times said.


LCI shares shot up nearly 60 percent Friday on the news, closing at 28.25 pence. They rose another 7 percent today to 30.25 pence.


Bill Timmins, the Aladdin’s chief operating officer, said Friday’s deal between LCI and the banks will not change LCI’s 40 percent equity position in the Aladdin or its management structure.


“Nothing changes. The composition of the board does not change,” said Timmins, who is also a top executive with LCI. “I will stay here and see this through this (bankruptcy) process.”


Michael Solow, an attorney for the bank group, said Friday that LCI’s deal with the banks does not get the Sommer Trust off the hook for its obligations under the keep-well agreement.


“We’re in discussions with them (the Sommer Trust),” Solow said.


Meanwhile, the Aladdin got some relief of its own Friday, when federal bankruptcy Judge Robert Jones gave final approval to a $50 million loan package for the resort.


The funding, provided by the Aladdin’s bankers, will give the Aladdin enough cash to continue operating until the bankruptcy case is resolved. Without the loan, Aladdin officials had warned the property was at risk of being shut down.


The Aladdin had received $9 million of this $50 million credit line on an emergency basis on Sept. 28, the day it filed for bankruptcy. More about Sg Online Casino


Since the loan is being made after the bankruptcy filing, the banks receive broad power in steering the direction of the bankruptcy case. Their $50 million loan has priority payment over all other creditors — in fact, the Aladdin cannot emerge from bankruptcy unless it presents a plan to pay off the loan in full.


The bankers also have broad powers to declare a default on the loan, a move that would allow the banks to immediately seize and shut down the Aladdin. The scope of these powers caused concern among many creditors, and led to weeks of negotiations between the Aladdin, the banks and other creditors to hammer out details of the loan package.


By the time Friday’s court hearing began, Aladdin attorney Gerald Gordon said the loan package was in its 69th draft.


“This has been a very long process, a very heavily negotiated process,” Gordon said. “We need to get this in place, we need to move forward.”


Though the banks keep their priority position and their power to declare default, the banks did make a number of concessions. For example, the banks must give notice to other creditors when a default is declared, and any creditor will have up to four days to request a court hearing to fight the move. Originally, the notice period was just 24 hours.


The original loan agreement also declared that the Aladdin would be in default if it varied from budget. The final agreement allows the Aladdin to vary from budget by up to $5 million.


And the banks also agreed to broad protections for the Aladdin’s employees and trade creditors. If the Aladdin is seized by the banks, the banks agreed to leave enough cash in the property to pay off employee wages and benefits, management severance packages, gaming chips and liabilities, and outstanding balances held by trade vendors. If there isn’t enough cash available to pay off the vendors, the banks agreed to make a $2 million credit line available to pay off the outstanding balances.


Protecting these parties was crucial to “making this case work,” said unsecured creditors’ attorney Frank Merola, since the Aladdin needs its employees to keep working and its trade vendors to continue serving the property if it is to emerge successfully from bankruptcy.