More than 39 percent of key Caesars Entertainment creditors have signed onto a financial restructuring plan for its most debt-saddled subsidiary, the casino company said today.
Caesars disclosed the creditor support in a Securities and Exchange Commission filing that expands on the restructuring plan first announced by the company Dec. 19. The plan, which would pave the way for bankruptcy, seeks to slash the subsidiary’s $18.4 billion debt by about $10 billion.
In an earlier filing, Caesars said it needs 60 percent of its first-lien debt holders to agree on the plan by Jan. 9 for it to become effective. Caesars is aiming for the subsidiary to file for bankruptcy by mid-January.
The plan would reorganize the subsidiary, which owns Caesars Palace in Las Vegas, by splitting it into an operating entity and a newly formed property company that would be “directly or indirectly” owned by a publicly traded real estate investment trust.
Today’s financial filing offers new details on how the restructured Caesars would function.
The plan would create two different leases, one for Caesars Palace and another for other properties owned by the subsidiary, according to the filing. Base rent for Caesars Palace would be $160 million per year for the first five years. For the other lease, base rent would be $475 million for three years.
To help finance the deal, the operating company would issue about $1.7 billion in new debt and the property company would issue about $3.8 billion.
Caesars said last week that it plans to merge with another affiliate, Caesars Acquisition Company, which will also help fund the restructuring.
The restructuring plan is by no means a done deal. Caesars could fail to reach that 60 percent threshold. And according to Reuters, the company may still face legal objections from junior creditors.
Shares of Caesars were down less than 1 percent at $15.45 at the close of trading today.