Caesars Entertainment Operating Company filed with the U.S. Bankruptcy Court a Second Modified Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “To effectuate the Plan, the Debtors will, among other things convert their prepetition corporate structure into two companies – OpCo and PropCo. The primary features of the credit-enhanced REIT structure contemplated by the Plan are as follows: PropCo, as a subsidiary of a REIT entity, will directly or indirectly own substantially all of the Debtors’ real property assets and related fixtures. Caesars Palace Las Vegas will be owned by ‘CPLV,’ a separate subsidiary of PropCo. OpCo will, other than with respect to certain properties and operations contributed to a taxable REIT subsidiary of the REIT entity, lease the real property and fixtures pursuant to two master lease agreements (the ‘MLAs’), one with PropCo and one with CPLV, and will manage the Debtors’ properties and facilities on an ongoing basis.”
The Disclosure Statement continues, “Before taking into account the PropCo Equity Election, the Debtors estimate that the funded debt across each of OpCo, PropCo, and the CPLV Entities will total approximately $8,179 million to $8,288 million….Specifically, on behalf of itself and its non-Debtor affiliates, the Plan contemplates New CEC making the following contributions: $406 million in direct cash contributions to fund Plan distributions, other restructuring transactions contemplated by the Plan and general corporate purposes…CEC will issue $1 billion of convertible notes to be distributed pursuant to the Plan, Depending on various New CEC equity value and volatility assumptions, this amount to value ranging from $959 – $1,506 million, or a range of 96% – 151%.”
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