LDN - Business

Caesars strikes deal to end main unit's bankruptcy

[September 27, 2016] By Tracy Rucinski

CHICAGO (Reuters) - Caesars Entertainment Corp has struck a deal with most of its operating unit's creditors, resolving billions of dollars in legal claims and paving the way to end to its subsidiary's costly bankruptcy, the casino company said on Tuesday.

Passengers leave the cabin after riding the 550 foot-tall (167.6 m) High Roller observation wheel, the tallest in the world, in Las Vegas, Nevada April 9, 2014. The wheel is the centerpiece of the $550 million Linq project, a retail, dining and entertainment district by Caesars Entertainment Corp. REUTERS/Las Vegas Sun/Steve Marcus

The Las Vegas-based company's main operating unit, Caesars Entertainment Operating Co Inc, filed for bankruptcy in January 2015. Creditors have said the private equity-backed parent looted the operating unit of its best assets and left it with $18 billion of unsustainable debt.

Caesars offered a sweetened $5 billion settlement on Wednesday to the operating unit's hold-out creditors.

Intense talks have been under way ever since, with an agreement finally announced in the early hours of Tuesday. The deal still needs approval from the U.S Bankruptcy Court in Chicago.

Under the agreement, Caesars and its private equity owners, Apollo Global Management <APO.N> and TPG Capital Management [TPG.UL], offered junior creditors an increased recovery of 66 cents on the dollar, the company said.

Hamlet Holdings, through which funds managed by Apollo, TPG and other investors own their interest in Caesars, will hold 6 percent of a new group to be formed through the merger of the parent company and Caesars Acquisition Co <CACQ.O>, rather than 14 percent envisioned under the previous plan.

(Reporting by Subrat Patnaik in Bengaluru and Tracy Rucinski in Chicago; Editing by Savio D'Souza and Lisa Von Ahn)


	*Back to top*