Inside Asian Gaming

inside asian gaming January 2015 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-packaged bankruptcy, as it’s known. The latest iteration proposes Caesars has a novel plan for rescuing its largest and most indebted subsidiary from a sea of red ink more than $18 billion deep. But creditors are skeptical, lawsuits are flying, and time is running out 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 leveraged buyout that took the world’s biggest casino operator private and saddled it on the eve of the Great Recession with more than US$30 billion of debt. It won’t get another seven. The New Year is unfolding amid the possibility that the company may have only weeks to fend off its many creditors and restore itself to financial health on its own terms. Caesars, which owns, operates or holds an interest in 50 casinos in 14 US states and five foreign countries and employs 68,000, hasn’t seen an annual profit since 2009, and its debt service