Caesars Pushes Bankruptcy Plan Ahead With Top Lender SupportLaura J. Keller
Caesars Entertainment Corp. said it reached a deal with the most-senior lenders to its bankrupt unit, allowing the casino operator to focus on getting support from the last major group holding out on its restructuring plan.
The agreement, announced Friday, requires the lenders to approve Caesars’ plan to reorganize its main operating subsidiary, the bankrupt Caesars Entertainment Operating Co. The pact is effective immediately, meaning a majority of the loan holders have signed it.
The casino company, owned by Apollo Global Management LLC and TPG Capital, now has support from holders of its two most-senior slices of debt for the plan to turn the unit into a real estate investment trust. The obligations total $11.7 billion.
“The senior creditors’ support of today’s agreement paves the way toward a confirmable plan for the restructuring” of the bankrupt unit, the Las Vegas-based company said in a statement Friday.
Caesars’ plan would cut the unit’s $19.9 billion of obligations almost in half and create a complex web of new companies, each holding new debt. The subsidiary sought Chapter 11 protection from creditors on Jan. 15.
Caesars spent almost a year attempting to gain the lenders’ support, starting discussions last September. It most recently restarted talks Tuesday after formal negotiations broke down Sunday, people with knowledge of the matter told Bloomberg on Thursday.
Shares of Caesars jumped 16.7 percent Friday to $8.02 after news the talks had been revived.
The company said in the Friday statement it would turn its attention to getting the support of more junior creditors, who’ve been the staunchest opponents of its proposal.
The official court committee representing that creditor class has previously insisted that owners forfeit control of the Caesars parent company in exchange for stopping lawsuits that some of its members have filed.
Caesars needs at least a majority of the second-lien bondholders to sign onto its restructuring plan in order to halt the lawsuits against the Caesars parent company. Those challenges threaten to put the still-solvent parent into Chapter 11 alongside its subsidiary.