Caesars' bankrupt operating division reports $23.1 million profit in October
8 Dec 2015
By Howard Stutz
By Howard Stutz
Because its Chapter 11 bankruptcy filing in January, Caesars Entertainment Operating Co. is required to file monthly revenue reports for the division, which includes Caesars Palace, Caesars Atlantic City, Harrah's Reno and more than a dozen regional casinos.
The company said net revenue for CEOC was $321.7 million for the month. Caesars said the CEOC's total assets are valued at almost $11.5 billion.
In the filing, Caesars cautioned that the financial statement was unaudited and was prepared "solely for the purpose of complying with the monthly reporting requirements" of the bankruptcy court.
CEOC is asking the court to convert the division into a real estate investment trust, which the company said would eliminate almost $10 billion of its $19.7 billion in long term debt. Companywide, Caesars has a gaming industry-high $22.6 billion in long-term debt.
Caesars wants to spin off CEOC into two companies — a REIT owning the real estate and buildings and an operating company leasing back the casinos. According to previous securities filings, creditors will control the REIT's board of directors.
The plan calls for the operating company to pay the REIT $165 million in annual rent for Caesars Palace and $475 million per year in rent for all the other casinos combined. Both leases have escalator clauses after seven years that could increase operating company payments to the REIT.
Caesars has said 80% of the company's first lien creditors, representing $12 billion of debt, have signed off on the plan. The bankruptcy may not be resolved until next summer.
Caesars' debt came from a $30.7 billion leveraged buyout by private equity firms TPG Capital and Apollo Global Management in 2008.
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