Caesars Entertainment Gets Approval For Exiting Bankruptcy

Las Vegas-based casino operator Caesars Entertainment Corp has finally brought a close to the two-year-long $18 billion bankruptcy of its main unit after wrapping up a lengthy legal battle.

Its main operating subsidiary, Caesars Entertainment Operating Co. Inc. (CEOC) received approval from a court this week for a plan that will result in removal of $10 billion of debt from its books and will result in a separation of its U.S. based property assets from its gambling assets. The company is expecting to exit from bankruptcy by end of the year.

In a statement Mark Frissora, president and chief executive officer of Caesars Entertainment, said

Upon CEOC’s emergence, we will be positioned to strengthen our financial and operational performance by pursuing new opportunities to invest in and expand our brands and business. While there is still much work ahead to complete this process, we are excited about the future of the Caesars enterprise.

KTNV Channel 13 Las Vegas

Under the reorganization plan Caesars Entertainment, which had been created after the buyout of Harrah’s, will be merging with another subsidiary, Caesars Acquisition Co. in order to consolidate casinos and hotel under one roof. According to analysts the company will have higher debt leverage than other casino operators but it was far better placed to attract the new generation of millennial customers.

Gaming Union analyst John DeCree pointed out that Caesars had been a pioneer in this regard but added that the main challenge for the company would be to get the new structure in order. The reorganization plan still requires regulatory approval and the necessary financing arrangements.

Caesars’ had proposed a deal worth $5 billion in order to exit bankruptcy but that ran into resistance from aggressive creditors.The plan finally received approval from the U.S. Trustee which acts as a U.S. bankruptcy regulator after Caesars modified certain provisions dealing with legal protection in the plan. U.S. Bankruptcy Judge Benjamin Goldgar called the result a monumental achievement during its confirmation hearing.

Owners Apollo Global Management and TPG Capital Management LP both of whom are private equity firms would retain a combined stake of 16 percent in the new entity which will be controlled by creditors. The firms will not be having any share in the real estate investment trust that holds its property assets.

Caesars Entertainment Corp. operates 50 casinos across five countries and 13 states in America. Its casino resorts primarily function under the brands of Caesars, Horseshoe and Harrah's. The company overall employs around 60,000 people.

Adrian Sterne

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