WILMINGTON, Del., Oct 5 (Reuters) - The operating unit of
Caesars Entertainment Corp will emerge from an $18
billion bankruptcy as soon as Oct. 6 in a deal that will transform the entire corporate family of the casino and resort operator. The restructuring plan settles claims by creditors of the operating unit that private equity firms that control Caesars stripped the unit of billions of dollars of assets before putting it into bankruptcy in 2015.
Creditors claim that Apollo Global Management and
TPG Capital Management LP, which led a 2008 leveraged buyout of Caesars, created affiliates to put choice properties out of reach of creditors. The bankruptcy exit plan brings various assets back under the control of Caesars Entertainment Corp by merging the parent
with Caesars Acquisition Corp and other affiliates, and
transferring stakes to creditors.
The following are the key points of the new Caesars Entertainment Corp after its operating unit emerges from bankruptcy, based on regulatory and court documents:
Ownership structure of the new Caesars Entertainment Corp: - 59.2 percent owned by creditors of Caesars Entertainment Operating Co - 32.1 percent owned by shareholders of Caesars Acquisition Corp - 8.7 percent owned by shareholders of Caesars Entertainment Corp
Debt structure The new Caesars will have about $9.6 billion in debt, compared to $25.6 billion prior to bankruptcy, and roughly $2 billion in cash.
Split of Caesars Entertainment Operating Co The bankrupt operating unit will emerge from bankruptcy as two separate entities, a new operating company and a property company. The new operating company will be a subsidiary of the new Caesars and will lease the properties it operates from a newly created, independent real estate investment trust, or REIT. Creditors of the bankrupt operating unit will own the REIT and it will have one tenant, the new operating company. The REIT will collect an initial annual rent of around $165 million from Caesars Palace in Las Vegas and around $465 million from a separate agreement for about 20 other locations. The 20 locations include Nevada casinos outside Las Vegas, a Bally's and a Caesars in Atlantic City, and Harrah's and Horseshoe casinos along the Gulf Coast and in Missouri, Iowa, Illinois and Indiana.
The new Caesars will operate approximately 47 casinos in 13 U.S. states and five countries, including the Caesars, Harrah's, Horseshoe and Bally's brands. A sample list of Caesars locations
Name casino space hotel rooms Harrahs Atlantic City 155,200 2,590 Harrah's New Orleans 125,100 450 Caesars Palace Las Vegas 124,500 3,980 Horseshoe Baltimore 122,000 -- Ballys Atlantic City 121,600 1,250
Rio All-Suites Hotel & Casino
(Las Vegas) 117,300 2,520 Caesars Atlantic City 115,000 1,140 Paris Las Vegas 95,300 2,920 Harrah's Las Vegas 90,600 2,530 Flamingo Las Vegas 72,300 3,460 Ballys Las Vegas 68,400 2,810
Planet Hollywood Resort & Casino
(Las Vegas) 64,500 2,500 The Cromwell (Las Vegas) 40,000 190
The LINQ Hotel & Casino
(Las Vegas) 31,900 2,250
(Reporting by Tom Hals in Wilmington, Delaware; Editing by Meredith Mazzilli)