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What is happening with Caesars Casino Empire?

02.01.2015 | Antoan Tok

Caesars Empire is not as it used to be some time ago and the company is trying to solve problems that it has at the moment. Gambling industry looked really promising a few years ago, and the tourism in Vegas was developing really well. So it was in 2006 when the deal to buy Caesars was announced. The deal was finally closed in 2008, but unfortunately that was just a couple of months before the bankruptcy of Lehman Brothers. Caesars counted on that deal for billion of dollars so that the company could make its interest payments. The company had to cut off about two hundred people from the corporate staff that it had in Las Vegas.

Although the money problems that Caesars has, it is still the biggest casino empire that owns properties all over the world. There are more than fifty hotels worldwide and 68,000 people working there. And perhaps the most famous one of these places is Caesars Palace, which is located in Las Vegas.

Caesars Entertainment had steady revenue of $ 8.66 bn, but the situation is not like that during the recent five years. Caesars continued loosing $2.9 bn every year; and one of the main reasons for that was because the leading place in gambling tourism was taken by Macau, in China. The number of visitors to the casino there was growing more and more, every year. The company tried to shift and shutter other assets during this period of time, like renovating some of its properties - the Linq and the Cromwell hotels, hiring headliners for performing shows in Caesars Palace. But a year ago the company had to close a few properties in Mississippi, Atlantic City and London. Comparing to the worldwide property it was less than one percent, but still it was not a good year for the casino empire.

Chris Jones, an analyst for Union Gaming Group, predicts that the company is not expected to close any more properties, but to reinvest again where it had not, which includes the gambling floor.

For the moment the situation is still not so good, because some creditors have tried this week to force the casino empire to declare bankruptcy. A few others have sued the company, claiming that most of the valuable assets of Caesars casino and hotel were ransacked. But Caesars says that all such claims are meritless.

But no matter all those negative things happening around the casino giant, the company shares that 60% of the holders are ready to go with the company’s plan to solve the problems. And all that was achieved after months of negotiations between them. The plan is to shed $ 10 bn in dept, which will come from its weighed-down operations division. This will leave the company with $8.6 bn, as well as with its annual $1.7 bn in interest payments to $ 450m.



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