Caesars, a casino brand with ambitions to spend US$1.5 billion redeveloping Manila International Airport in the Philippines and to add a casino resort next door, is facing the prearranged bankruptcy of its Caesars Entertainment Operating Co (CEOC) unit, reports Bloomberg News quoting two people with knowledge of the negotiations.
The news outlet said that under the plan being negotiated by senior creditors including Elliott Management Corp and Pacific Investment Management Co, the casino company would put CEOC into so-called Chapter 11 bankruptcy proceedings in the U.S. That could happen as early as January 14, said the people, who asked not to be identified because the discussions are private, added Bloomberg.
Caesars Entertainment Corp on Monday said it expects to create an extra US$250 million to US$300 million in cash flow in 2015 through various cost savings measures, including job losses.
The company operates nearly 40 casinos in 15 U.S. states and Canadian provinces.
The long-term debt of the company’s consolidated business reached US$22.9 billion at the end of September, down from US$24.2 billion at the end of June.
Caesars Entertainment Corp on Monday reported a third-quarter net loss of US$908 million or US$6.29 per share compared with a loss of US$761 million or US$6.03 per share a year earlier.
Caesars, taken private by private equity firm Apollo Global Management LLC and TPG Capital for US$30.7 billion in 2008, has lost money every year since 2009.
The brand has long coveted casino operations in the high growth Asian region. After several false starts – including US$577 million spent buying a Macau golf course in an unsuccessful attempt to parlay it into a casino project – Caesars now has a foothold in South Korea.
It has a joint venture with Indonesia’s Lippo Group to develop and manage a casino resort at Yeongjong Island. The location is part of Incheon Free Economic Zone near the South Korean capital Seoul and its Incheon International Airport.
The scheme is projected to break ground in July 2015 and to have a first phase opening in 2018, Steven Tight, president international development for Caesars Entertainment, told GGRAsia in October.
Caesars has also turned its attention to the Philippines, where the government has made partnerships with private sector investors to build so-called integrated resorts featuring gambling and entertainment and designed to attract overseas players and other foreign tourists.
Caesars’ ambitions for what Mr Tight last month described to GGRAsia as “the world’s first fly-in integrated resort” at Manila’s main airport, might also include a light rail link for terminals 1 and 2, reported the Manila Standard newspaper on Tuesday.
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”Assuming that our [Tigre de Cristal] phase two project and the other future operators’ development plans remain on track, we may see the benefits of a ‘cluster’ effect [in the Primorye Integrated Entertainment Zone] as early as 2021”
Summit Ascent, lead developer of Tigre de Cristal