Caesars Entertainment Corporation (NASDAQ:CZR) revealed that together with its sponsors, the affiliates of Apollo Global Management, LLC and TPG Capital, LP, it had proposed improved contributions for the restructuring of Caesars Entertainment Operating Co., Inc. (CEOC).
The proposal follows recent discussions with CEOC’s creditor constituencies and debtor subsidiaries that aim to reach an agreement among all parties involved in the restructuring prospects.
The proposal is looking at roughly $1.60 billion in additional value that will be distributed to second lien note holders. It will enhance the recovery to second lien note holders and unsecured creditors alike.
The additional value of about $1.60 billion includes roughly $954 million of the company’s equity from its sponsors and roughly $92 million of the company’s equity from Caesars Entertainment itself.
Effects of the Proposal
The proposal will lead to the depletion of all Caesars Entertainment equities held by the company’s sponsors. Moreover, once the merger deal between Caesars Entertainment and Caesars Acquisition Company (NASDAQ:CACQ) has been completed, the only continuing stake of the sponsors in the company would only be comprised of their Caesars Acquisition stake. CEOC creditors will then become the major shareholder, owning over 62% of the merged company.
The proposal will expire at 11:59 p.m. on Friday. Should it not receive the necessary approval, Caesars Entertainment and the sponsors backing the proposal is irrelevant.
Gamblit Gaming Partnership
Earlier this month, Caesars Entertainment has entered into a multi-year deal with Gamblit Gaming that will enable the former to become the first casino operator to bring the latter’s offerings to the market.
Starting next month, Caesars Entertainment will bring the Model G and Tristation positions to California and Nevada. The gaming positions will feature various themes and skill-based games.
Further expansions across Caesars Entertainment’s vast network are expected to follow. More specifically, the two companies seek to launch over 100 gaming positions in other markets early next year.
Mark Frissora, Caesars Entertainment CEO and President, has boasted that the new partnership with Gamblit Gaming is a significant part of the company’s innovation strategy that is geared toward the future of casinos.