Caesars Entertainment is out of bankruptcy. But that does not mean that it has money. The Las Vegas gaming giant is in dire need of money.
To get money, Caesars Entertainment is selling Harrah’s Las Vegas real estate. The new buyer is VICI Properties.
This transaction will mean that Caesars will get $1.14 billion. But this is not money to do big projects. It is a small amount to help the gaming giant to start crawling.
The money is to help Caesars get rid of debt. For now, the biggest debt is that with Centaur Holdings. There are other businesses the gaming company needs to settle.
Indiana Grand and Hoosier Park racinos up for sale?
They are Indiana Grand and Hoosier Park racinos. The two racinos collect a sum of $480 million in 2016.
Caesars Entertainment has other assets. There is the Horseshoe Southern Indiana and the Horseshoe Hammond.
According to Mark Frissora, the transaction comes at the right time. The CEO says that the gaming company can move forward. They will pursue other growth opportunities.
Pursuing Other Growth Opportunities
This time, they will not need any funding. The gaming company will not incur another debt.
According to lawyers, the trust still holds Caesars properties. Currently, the trust is holding 18 properties. They include Caesars Atlantic City, Caesars Palace, and Bally’s. It leases these properties back to the company.
This gaming company is not the only one with REIT. There are others. In 2016, MGM Resorts creates its real estate. The company has not gone bankrupt.
The trust is to take care of the company’s properties. Some of the properties in the list are Mirage, Mandalay Bay, and Monte Carlo.
A Plan For Convention Center
REIT is willing to spend over $1 billion. This is a clear indication of the trust REIT has in Caesars. It still holds that the gaming company will rise to its feet.
This is not what investors feel. They have mixed reactions. Some of them feel that it is a misplaced investment.
When talking about the bankruptcy case, lawyers say a lot. They say that this is one of the most complex bankruptcy cases in the USA. It involves a staggering figure of $18 billion.
In exchange for this, creditors owe the money ownership of the REIT.
The announcement of the sale of the real estate last week has profound effects. The gaming company’s stock falls 1.3 percent. That is the announcement. What will happen when money changes hands soon?
Investors are not happy. They are apprehensive. They feel that Caesars should not again reinvest in racetrack casinos. Some are saying that the gaming company should consider quitting.
Those who say these words have reasons. They claim that racetracks are struggling in several states. They argue that investing in a crippling industry isn’t a wise thing for Caesars.
Whether they are right or not, Caesars is no stopping. The gaming company wants to do what it thinks will help it regain the glory. The only sure option at hand is to reinvest in racetrack casinos. There may be other ways though.