Large amount of debts force Caesar Entertainment Corp to file Chapter bankruptcy.
The operating unit Caesar Entertainment Corp filed for Chapter 11 bankruptcy on Thursday, as it plans to cut $10 billion of debt. The company has support of its senior bondholders to carry out plan.
According to the filling, assets and liability of over $1 billion value were registered by Caesar. $30 billion leverage buyout of Harrah Entertainment was also included in debts. After months of talks with the borrowers and years of poor financial results by Caear, former casino giants, deteriorated the financial statements of the company. It has also reported losses in four previous consecutive years. Liabilities of the company have surpassed $28 billion.
Las Vegas based Casino Company has planned to divide into two separate operating units, real estate trust and Casino Company. It has no plans of closing down any of its forty four gambling units.
Caesars Growth Partners, Caesars Entertainment and Caesars Entertainment Resort Properties have not filed for bankruptcy, according to Caesar Entertainment Corp.’s statement.
“All properties are continuing to host meetings and events and provide the facilities, amenities and experiences that guests enjoy,” official statement of the casino company after filing for bankruptcy.
The junior bondholders of Caesar Corp. are not in favor of the restructuring plan because they will get return of less than 10% for the $5 billion lent to the company.
Therefore, they filed an involuntary petition in U.S. Bankruptcy Court, Delaware, against the operating unit of operating unit. They want to start a bankruptcy process on their own accord in Delaware.
Chief Executive Officer of Caesars Gary Loveman while announcing the filing that its hotels and casino business will continue working and will endure to host events and meetings promising customers about their faithfulness point will still grow and stage performers as lined up by the company will continue to perform as per the schedule. Company’s spokesperson said that they plan to keep paying its dealers in full.
He further said, “I am very confident in the future prospects of our enterprise, which will combine an improved capital structure with a network of profitable properties,”
However, the filing of bankruptcy does not involve the parent company which is Caesars Entertainment Corp. and other companies which are affiliated like Caesars Entertainment Properties & resort and Caesar Growth Partners.
There was no surprise on the Caesars Entertainment filing in a bankruptcy court of Chicago. The company has already negotiating with the Lenders and creditors for several months now along with the restructuring plan which will modify the division into a real estate trusts one will be modified to lease property and the other will be to own properties –assuring new debt and cash to its creditors.