Caesar's Entertainment to File for Bankruptcy
In an attempt to bring a huge amount of debt under control, Caesars Entertainment will file for bankruptcy mid January. The largest casino chain in the US will also be restructured. It appears that a deal has been reached with senior creditors meaning that a pre-arranged bankruptcy can take place and it would only be Caesars Entertainment Operating Company that would file for Chapter 11 bankruptcy.
As part of one of the largest buyouts ever taken place, six years ago Caesars took on a huge $22.9 Billion in debt and the group has lost money each and every year since 2009. Remaining solvent has been a major problem for Caesars since that debt was taken on board, despite numerous swapping of assets and refinancing. Part of the whole deal will involve Caesars Entertainment Corp merging with Caesars Acquisition Co in a stock transaction that would free up around $1.7 Billion to finance the restructuring.
If all goes to plan then Caesars would lose around half of its debt and it comes after over three months of negotiations with major creditors. The bankruptcy deal would see Caesars Entertainment Operating Co turned into a real estate trust and combined with the deal to 'buy back' the acquisitions arm would free up at least some cash and mean no outside financing would be required for the restructure. The news is being met with some optimism and is a big step towards appeasing the larger creditors, with Caesars shares rising a little on the back of it all.