Caesars Entertainment Corp (CZR.O) has struck a deal with most of its operating unit’s creditors, resolving billions of dollars in legal claims and paving the way to end to its subsidiary’s costly bankruptcy, the casino company said on Tuesday.
The Las Vegas-based company’s main operating unit, Caesars Entertainment Operating Co Inc, filed for bankruptcy in January 2015. Creditors have said the private equity-backed parent looted the operating unit of its best assets and left it with $18 billion of unsustainable debt.
Caesars offered a sweetened $5 billion settlement on Wednesday to the operating unit’s hold-out creditors.
Intense talks have been under way ever since, with an agreement finally announced in the early hours of Tuesday. The deal still needs approval from the U.S Bankruptcy Court in Chicago.
Under the agreement, Caesars and its private equity owners, Apollo Global Management (APO.N) and TPG Capital Management [TPG.UL], offered junior creditors an increased recovery of 66 cents on the dollar, the company said.
Public stockholders of Caesars Entertainment will hold 6 percent of a new group to be formed through the merger of the parent company and Caesars Acquisition Co (CACQ.O).