IAG JANUARY 2015 - page 26

inside
asiangaming
January2015
26
Feature
guarantees that as currently structured it never will. The face value
of the debt stood at $25.4 billion at the end of the third quarter.
Most of it, $18.4 billion, is held by the subsidiary known as Caesars
Entertainment Operating Co., which directly owns or manages 38
of the casinos. Given the leverage and the fact that CEOC’s fate is
bound up with mostly stagnant US regional markets, its survival
past this year, absent new financing, in Caesars’ own words, is a
matter of “substantial doubt”.
Negotiations have been ongoing and intense since last summer
with holders of the company’s bank loans and first-lien bonds to
reach agreement on a court-supervised reorganization of CEOC, a
pre-packagedbankruptcy, as it’sknown. The latest iterationproposes
Caesarshasanovel plan for rescuing its largest andmost indebted
subsidiary fromaseaof red inkmore than$18billiondeep.
But creditorsareskeptical, lawsuitsare flying, and time is runningout
The
BIG
Bankruptcy
C
aesars Entertainment has spent the last seven years
trying to grow, sell, mortgage, cut and restructure its
way out of the consequences of a leveragedbuyout that
took the world’s biggest casino operator private and
saddled it on the eve of theGreat Recessionwithmore
thanUS$30billionof debt. It won’t get another seven. TheNewYear
is unfolding amid the possibility that the company may have only
weeks to fend off its many creditors and restore itself to financial
healthon its own terms.
Caesars,whichowns, operatesorholdsan interest in 50casinos
in 14 US states and five foreign countries and employs 68,000,
hasn’t seen an annual profit since 2009, and its debt service
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