Caesars reaches agreement for debt restructuring

The subsidiary, Caesars Entertainment Operating Company or CEOC, will file for bankruptcy in mid-January, the company said in a statement.

“The planned restructuring will allow us to establish a strong and sustainable capital structure for CEOC and maximize value for our stakeholders,” Caesars CEO Gary Loveman said in the statement. 

I want to thank this creditor group for its support of the restructuring. We believe the financial restructuring plan we are announcing today is in the best interests of all of CEOC’s stakeholders,”

Loveman noted that business operations will “continue as usual” throughout restructuring, as will the Total Rewards program.

The subsidiary, which owns Caesars Palace, is saddled with US$ 18.4 billion in debt. The restructuring plan will reduce that by about US$ 10 billion, according to the statement.

“Combined, these actions will result in a stronger, more competitive and sustainable CEOC and will better position Caesars Entertainment for future growth, investment and success,” Loveman said.

Alex Bumazhny, an analyst for Fitch Ratings, was skeptical that the plan announced today will resolve everything between Caesars and its creditors. “Other creditors have to sign onto this, which is a big ‘if,’” he said. “It looks like (Caesars) made progress, but there’s still a lot of things to be clarified.” Caesars has struggled with debt since it went through a US$ 30.7 billion leveraged buyout six years ago. The company has lost money every year since 2009.

The plan announced today is contingent upon the release of all litigation against the company, Caesars said. It also still needs the approval of bankruptcy court and gaming regulators. Shares of Caesars were up 2.43 percent at the close of today’s trading.