The entertainment giant Caesars Entertainment and its purchasing entity, Caesars Acquisition Company, have amended their consolidation agreement. This transaction, connected to the enormous $18 billion insolvency and reorganization of Caesars Entertainment Operating Company (CEOC), the primary operational arm of Caesars Entertainment, was first declared in December 2014.
In a major move toward settling its bankruptcy, CEOC obtained the green light from a US bankruptcy court in June to begin soliciting creditor ballots on its proposal to restructure liabilities and ultimately exit Chapter 11. The corporation initially pursued this voluntary restructuring in January 2015.
CEOC’s suggested reorganization strategy, presented in October 2015, sought to substantially decrease its overall debt by $10 billion and divide CEOC into two separate entities: a fresh operational company and a real estate investment trust.
The planned amalgamation of Caesars Entertainment and Caesars Acquisition Company is projected to produce capital, a portion of which will be allocated to reimburse CEOC’s creditors. Nevertheless, the modified conditions have altered ownership percentages. Reuters, referencing regulatory documents, indicates that Caesars Acquisition Company stakeholders will now possess a 27% interest in the combined entity, reduced from the originally proposed 38%.
Caesars Entertainment issued a statement declaring the modified merger contract a crucial stage in CEOC’s reorganization, effectively clearing the path for the entire procedure to advance. They conveyed confidence regarding recent accords reached with significant creditor factions and recognized the backing received for the rehabilitation strategy thus far.
Nevertheless, obstacles remain. Reuters indicates that subordinate creditors still pose a possible hurdle. They are demanding a substantial $12 billion from Caesars Entertainment and its private investment supporters, Apollo Global Management and TPG Capital.
Caesars contended in court that if judgments favor these bondholders when a provisional injunction concludes in August, it could endanger their participation in the reorganization scheme and potentially force both the corporation and CEOC into insolvency.
The concluding hearing for CEOC’s restructuring blueprint is set for January 17, 2017.
