Research Desk Line-up: Nevada Gold & Casinos Post Earnings Coverage
LONDON, UK / ACCESSWIRE / October 10, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Caesars Entertainment Corp. (NASDAQ: CZR), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=CZR. The Las Vegas, Nevada based Company announced on October 06, 2017, that it had completed the merger with Caesars Acquisition Company (CAC) and finalized the restructuring of Caesars Entertainment Operating Company, Inc. (CEOC) and its debtor subsidiaries. The announcement comes following CEOC's exit from Chapter 11 Bankruptcy proceedings after getting requisite approvals from gaming regulators and completing various formalities. The merger, as well as restructuring of CEOC, will help Caesars Entertainment to improve its capital structure and plot its future growth story. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Resorts & Casinos industry. Pro-TD has currently selected Nevada Gold & Casinos, Inc. (NYSE AMER: UWN) for due-diligence and potential coverage as the Company announced on September 14, 2017, its financial results for Q1 FY18 which ended on July 31, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Nevada Gold & Casinos when we publish it.
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Commenting on the development, Mark Frissora, President and CEO of Caesars Entertainment, said:
"The conclusion of CEOC's restructuring leaves Caesars Entertainment with an expected enterprise value of approximately $20 billion based on yesterday's closing prices. With reduced leverage, increased free cash flow and the new REIT structure, we are positioned with a solid foundation to pursue a diversified growth strategy. Throughout the restructuring process, Caesars has invested significantly to upgrade and renovate its facilities. Total CapEx from 2015-2017 is expected to exceed $1.5 billion, which will benefit the Company going forward. We are also executing hundreds of initiatives to generate incremental revenue, as well as to enhance operational efficiency, guest experiences and employee engagement through technology-driven innovation and process improvement."
Caesars Entertainment's wholly owned subsidiary CEOC had filed for bankruptcy in January 2015 after amassing nearly $18 billion in debts. The case became more complex as certain creditors claimed that the private equity firms which had control of the Company sold off assets valued billions of dollars before putting up the Company into bankruptcy in 2015. The creditors had filed lawsuits against Apollo Global Management and TPG Capital Management L.P., who had a significant stake in Caesars, claiming that they had transferred properties to affiliates created by them so that they were out of reach of the creditors.
The New Restructuring Plan
After lengthy discussions and nearly two and half years of filing of bankruptcy protection, The US Bankruptcy Court for the Northern District of Illinois confirmed the plan for the complete reorganization of CEOC in January 2017. As per the reorganization plan, various assets were brought back into the control of Caesars Entertainment by way of merger with Caesars Acquisition Corp. and its affiliates. After the merger, the entire organizational structure of Caesars Entertainment undergoes a complete change. As per the merger agreement, CAC's stockholders will receive 1.625 shares of Caesars Entertainment for each CAC share they hold.
Additionally, the restructuring envisions the division of CEOC into two separate Companies, one will be the gaming operations Company and the second will be an independent real estate investment trust (REIT) called the VICI Properties, Inc. (VICI). The gaming operations Company will become a subsidiary of the newly merged Caesars Entertainment and Caesars Acquisition Corp. The gaming operations Company is expected to lease properties from VICI. Creditors of the bankrupt gaming operations Company will own VICI. VICI will have only one tenant the new gaming operations Company. VICI will consist of 18 properties including Caesars Palace Las Vegas, Caesars Atlantic City, and Bally's Atlantic City. Caesars Entertainment will be paying rent to VICI for these properties. Both Caesars Entertainment and VICI will jointly take decisions on matters like renovations, development and growth investments, etc.
During the entire bankruptcy period, the business and operations of CEOC continued normally and properties owned by it as well as those owned by Caesars Entertainment continued to do usual business. Once the restructuring plan is in place and operational, Caesars Entertainment will continue to operate the various casinos including Caesars, Harrah's, Horseshoe, and Bally's brands.
New Board of Directors for CEOC
In a separate announcement, Caesars Entertainment also announced the new Board of Directors and Chairman for CEOC. The new Board members include Thomas Benninger, John Boushy, John Dionne, Matthew Ferko, Don Kornstein, David Sambur, Richard Schifter, Marilyn Spiegel, and Christopher Williams.
Mark Frissora, the current President and CEO of Caesars Entertainment will also continue to be a member of the Board. The Board members selected James Hunt as Chairman. James has extensive business expertise and brings with him a wealth of experience from his decade-long stint with The Walt Disney Company and 15 years at Ernst & Young. He also has in-depth Board experience and has been a member of Board in Companies like Brown & Brown, Inc., The St. Joe Company, and Penn Mutual Life Insurance Co., and institutions like the Nemours Foundation and Children's Hospital Los Angeles.
With the restructuring plan in place, Caesars Entertainment has a solid plan to move forward with growth projects and opportunities to make up for the lost time. The Company has lined up several initiatives for improving customer satisfaction and employee engagement. Some of the initiatives include development of a convention center and other similar projects to monetize its underutilized properties. Caesars Entertainment plans to use its strong cash flow from CEOC to fund growth opportunities across global markets. The Company also plans to invest in new best-in-class, secure, cloud-based enterprise-wide technology solutions to improve its financial and operating performance. The Company also plans to strengthen its Customer Loyalty Program by improving its marketing by linking machine learning to customer behavioral data.
Caesars Entertainment has approximately $2 billion in cash because of the restructuring and plans to use the cash for projects for future growth of the Company.
Last Close Stock Review
Caesars Entertainment's share price finished yesterday's trading session at $12.65, slipping 1.17%. A total volume of 5.80 million shares have exchanged hands, which was higher than the 3-month average volume of 2.85 million shares. The Company's stock price skyrocketed 3.27% in the last three months, 29.74% in the past six months, and 64.50% in the previous twelve months. Additionally, the stock soared 48.82% since the start of the year. The stock currently has a market cap of $1.93 billion.
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