Creditors of Caesars Entertainment Corp.’s bankrupt operating unit want a stake in the parent company in exchange for supporting a plan to restructure the sprawling casino empire, according to documents posted Thursday on a bondholder website.
The agreement between CEC and CEOC is effective immediately and will be supported by CEOCs most senior creditor constituencies. That is because both together hold approximately $12 billion of the senior capital structure of the Caesars Entertainment Operating Company.
In a statement, Caesars said the agreement allows the company to focus on gaining support from the last major debt holder group that has yet to agree on the restructuring plan for Caesars Entertainment Operating Co.
CEOC was placed in Chapter 11 by Caesars in January in order to convert it into a real estate investment trust. The move would create two companies, a REIT owning the real estate and buildings and an operating company leasing back the casinos. It is estimated that the restructuring will cut nearly $10 billion in debt from CEOC which operates twelve regional casinos along with Caesars Atlantic City, Harrah’s Reno and Caesars Palace. The Bank RSA and a summary of the transaction are available in the Media Resources section of the CEOC Restructuring Web site at http://www.ceocrestructuring.com/media-resources/. The company would like to completion of the restructuring to be consensual, according to Caesars.
Caesars Entertainment and CEOC continue to engage in discussions with junior creditors to build additional support for the previously announced Second Lien Restructuring Agreement in an effort to complete the restructuring consensually. The company indicated that the Bank RSA is considerably similar to that of the earlier deal disclosed with Bond RSA. But the demands demonstrate the potentially large cost to Caesars and its private-equity backers, Apollo Global Management LLC and TPG, as…
Shares of Caesars jumped 16.7 percent Friday to $8.02 after news the talks had been revived.