Troubled Caesars Entertainment, America’s largest casino chain, is in talks with its senior creditors to restructure it massive debt load, The Post has learned.
The talks are likely aimed at reaching a deal that would give the senior debt holders positions in the two newly created pieces of Caesars that hold the most promising assets — including its online gaming business, sources said.
Gregg Klein, an analyst at Imperial Capital, wrote in a report Wednesday that the “restructuring [which is in the works] could possibly be headed to a bankruptcy filing.”
Such a move, which may only affect some of the brick and mortar casinos, “would create significantly negative headlines and potential risks that we think would put pressure on the stock.”
As a result, Klein lowered his price target from $17 to $9.
Caesars shares fell 2.3 percent on Wednesday, to $13.38.
The net loss attributable to Caesars nearly doubled to $852.9 million in the first half of 2014, while casino revenue dipped, falling 5.3 percent to $2.7 billion in the period.
Meanwhile, Caesars’ debt pile is growing. The company’s long-term debt hit $24.2 billion at the end of June, up from $20.9 billion in December.
Caesars owners Apollo Global Management and TPG Capital last year split the chain into three companies — including one with faster-growing online assets and another with troubled brick-and-mortar casino operations.
The most troubled piece includes two of Caesars’ Atlantic City casinos, Bally’s Atlantic City and Caesars Atlantic City. Those are two of the eight casinos that are now operating overall in faltering Atlantic City.
There is reason for Caesars to get the restructuring done sooner rather than later, sources said.
Caesars owes its junior creditors, including David Tepper’s Appaloosa Management, $400 million in December. While it can make the payment, Caesars might want to finish the debt restructuring beforehand so it does not give that $400 million to those creditors, but instead to senior creditors who support the restructuring, a source close to the situation said.
At the same time, Caesars is trying to move control of its profitable rewards program out of the brick and mortar side of the business. It operates more than 50 casinos under the Bally’s, Caesars, Harrah’s and Horseshoe brands.
The company did not return emails or calls for comment.