that at that time, or sometime before then, a contentious debt-for-equity or distressed debt exchange will need to be consummated."
"Caesars Entertainment Corp. is working to improve its capital structure, butdespite moves to cut costs, buy back debt and pursue a spinoff transactionduring the second quarter, Caesars' $23.7 billion debt load is still the elephant inthe room and could push them into Chapter 11," reports The Deal Pipeline.
Caesars' private equity owners are planning to split the company toseparate its most valuable assets from debt-encumbered assets:
Caesars Entertainment is proposing to create a new and separate company,Caesars Growth Partners LLC ("Growth Partners").
The new company will be jointly owned by Caesars and its current shareholders, including TPG and Apollo.
Growth Partners will own valuable assets spun off from Caesars,including the Planet Hollywood casino in Las Vegas, the company's stake in thenew Horseshoe Casino in Baltimore, and its online division (which includesonline games, real-money online gaming, and the successful World Series of Poker franchise).
Caesars Acquisition Company, the holding company of Growth Partners, filedan initial registration with the SEC on July 10 and Caesars expects final SECapproval
and listing of the new company's shares on NASDAQ in the corningmonths.
Questions raised by Caesars' planned split:
Would a casino at Suffolk Downs be part of Growth Partners or the oldCaesars? Is the Massachusetts Gaming Commission investigating thesuitability of Growth Partners?
Mitch Garber, CEO of Caesars' online business (not Caesars CEO GaryLoveman), will be the CEO of Growth Partners. Mitch Graber is not on the MassGaming Commission’s current list of qualifiers who are under investigation for suitability. Is the Massachusetts Gaming Commission investigating thesuitability of all of the proposed executives?
What happens if the spin-off plan does not succeed? Even if it does, canGrowth Partners truly escape the legacy liabilities of old Caesars? What if interactive gaming turns out to not be the growth engine the company is hopingfor?
If the plan moves forward, how will it affect Caesars long-time host communitieslike Atlantic City and Las Vegas? If the private equity owners are willing toleave longtime host communities high and dry, will they also forsake Bostondown the road?