Caesars Entertainment is doing a lot of restructuring, but can it assist their economically ship that is sinking?
Can this number of Titanic debt be salvaged from dragging the ship to the base of this financial ocean? This is the question being asked as Caesars Entertainment Corp. put Planet Hollywood one of their kingpin Las vegas, nevada Strip properties into a new holding company, along side the Interactive Division and the still-being-built Horseshoe Casino Baltimore. The company has instructed its shareholders they’ve only until Oct. seventeenth getting in for a stock fire sale to generate $1.18 billion in much-needed money infusions as well. And also you thought your garage sales were busy.
The Securities and Exchange Commission (SEC) filing made by Caesars announces that shareholders are certain to get very first dibs on one share each of the brand new Caesars Acquisition Co. (CAC) for each and every share associated with the existing parent business they own. This restructuring happens to be into the works since this Spring that is past ended up being officially authorized by the Nevada Gaming Control Board in July.
The newly formed CAC will be a partial owner of the also newly created Caesars Growth Partners, and along with Caesars Entertainment (are you dizzy yet?), the new entity will own Planet Hollywood, the Baltimore under-construction property, and Caesars Interactive Entertainment, which, of course, spearheads the World Series of Poker (WSOP) real money online poker brand that just recently launched for Nevada Internet players under the restructuring.
Now you might think the point of all this fundraising is to pay the company down’s massive existing debt, but evidently, they have been studying the White House financials, because they say the raised funds will go towards brand new casino jobs in the U.S., as well as more online development, together with 888 Holdings, to obtain a few on-line casino sites up and rolling in New Jersey when that state goes online on November 26. They must be in a pissing competition with Obama for the highest achievable debt ceiling.
Gambling’s Highest Debt Load
Think we’re kidding? Caesars has the dubious honor of keeping the casino industry’s highest-ever long-lasting debt load at $23.5 billion. In early 2014, they will execute a refi of about $5 billion of that, and got about $200 million towards that amount in a stock purchase already.
This debtload that is somewhat scaryn’t appear to be deterring anybody from teaming up with the gaming behemoth though; Detroit-based Rock Gaming is in on a joint venture with Caesars to own and run the $400 million Horseshoe Baltimore once it’s completed and ready to open in 2015. And Suffolk Downs Racetrack in Boston went into partnership using the ongoing company as well, as they attempt to get their $1 billion casino project accepted and built in Boston in Massachusetts’ Battle associated with the Casino Giants game.
Tends even Caesars Deputy General Counsel Michael Cohen isn’t entirely sure about this restructuring gameplan, nevertheless.
‘Compared to our capital structure, that is not a big change,’ he told the Nevada Gaming Control Board about the organization’s spinoff concept when they signed down on the plan in July. ‘Caesars includes a complete great deal of debt. We think it is manageable, but others disagree.