U.S.-based casino business Caesars Entertainment Operating Company Inc (CEOC) is on the path to concluding its reorganisation under Chapter 11 of the U.S. Bankruptcy Code with the agreement of creditors, the parent Caesars Entertainment Corp said in a Tuesday filing.
“The U.S. Bankruptcy Court for the Northern District of Illinois has confirmed the debtors’ plan of reorganisation, paving the way to conclude CEOC’s court-supervised restructuring process in 2017,” stated the filing to Nasdaq.
It added this also established a route whereby the U.S.-based gaming venues run by the operating company can be put into a newly-created real estate investment trust – also known as a REIT – to be owned by some of the operating entity’s creditors.
“Caesars Entertainment [Corp] will not own any equity interest in the REIT. In addition, in connection with CEOC’s emergence, Caesars Entertainment and Caesars Acquisition Co [Inc] must complete their previously announced merger,” added the filing.
Caesars Acquisition Company was formed to make an equity investment in Caesars Growth Partners LLC, which in turn was set up to acquire and develop operating assets in online gaming and land-based casinos. Caesars Growth Partners’ assets include Caesars Interactive Entertainment, offering social and mobile games; the World Series of Poker brand; and the Planet Hollywood casino hotel in Las Vegas, Nevada.
CEOC – which runs some of the group’s most profitable venues including flagship properties in Las Vegas – requested reorganisation under Chapter 11 from a court in Chicago, Illinois in January 2015, with a US$18 billion debt load. It was part of a plan to cut group debt by approximately US$10 billion.
“The new Caesars will be a stronger company with a healthy balance sheet, a plan for growth and investment, operating discipline and a relentless focus on employee and customer satisfaction,” said the group’s president and chief executive, Mark Frissora, in a statement contained in Tuesday’s filing.
The Caesars group has an interest in a foreigner-only casino project slated for Incheon, South Korea. Hong Kong-listed real estate developer Lippo Ltd, one of the partners in a consortium for that scheme, confirmed in a filing in early December that it was still negotiating the disposal of its stake in the venture.
The reorganisation plan for the Caesars operating entity remains subject to obtaining gaming regulatory approvals; the completion of the merger of Caesars Acquisition with the parent; “certain financing transactions”, and various other closing conditions, said Tuesday’s filing.
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Chairman of gaming operator Las Vegas Sands and subsidiary Sands China