Caesars Entertainment Corp.’s main operating division has adjusted the way it intends to emerge from bankruptcy and wants to prolong its period of exclusive control over its restructuring plan by four months.
The division, known as Caesars Entertainment Operating Co. or CEOC, announced today that it filed an amended restructuring plan in bankruptcy court and asked to extend its exclusivity period until March 15. Court records show Caesars’ exclusivity period — during which no one else can file a competing restructuring plan — is due to expire Nov. 15.
Caesars said in a statement that it has support from creditors holding more than 80 percent of the division’s first-priority debt. It said the plan also provides “enhanced recoveries” to junior creditors.
According to court records, the restructuring plan would give first lien bank lenders a 107 percent recovery through a combination of cash and debt, while first lien noteholders would recover 88 percent via cash, debt and equity.
Non-first lien creditors, meanwhile, could receive an 18 percent recovery through equity and debt if they vote to accept the plan. If they reject the plan, they could only receive a 5 percent recovery through equity, records show.
Caesars said it has the backing of about $12 billion — or two-thirds — of the division’s capital structure and is continuing efforts to get junior creditors on board. Extending the exclusivity period will provide the division with more time to try to reach a consensus on the amended plan.
The division, which entered bankruptcy in January, is seeking to trim some $10 billion in debt that stems from a massive leveraged buyout in 2008. Caesars hopes to split the division into a real estate investment trust that owns casino properties and an operating company that manages them.
The division’s amended plan “provides for a tax-efficient corporate and balance sheet restructuring that maximizes the value of the business,” Caesars said. The amended plan also gives creditors recoveries that are “materially improved” from the original reorganization plan, the company said.
Caesars Palace is the company’s only Las Vegas property included in the bankruptcy filing, which also encompasses Caesars properties in Lake Tahoe, Atlantic City and other places around the country. The company noted today that the division’s business improved over the first half of this year due to factors including “marketing, labor efficiencies and strong hospitality revenues.”
Shares of Caesars were trading about 2 percent higher this afternoon.