Caesars Entertainment Corp. named top officers to lead its largest unit in anticipation of a US stock listing and debt restructuring of the division.
Long-time Caesars executive John Payne was named CEO of Caesars Entertainment Operating Co., Mary Elizabeth Higgins was named chief financial officer and Tim Lambert was appointed general counsel, according to a statement cited by Bloomberg. Caesars also appointed two independent directors to the seven-member CEOC board.
The appointments suggest the Las Vegas-based parent plans to offer stock to the creditors of its most-indebted division as part of a financial restructuring. The operating company owes about 80% of the $23 billion in debt taken on by Caesars Entertainment in a 2008 private-equity buyout.
“We are focused on deleveraging and creating value at CEOC and today’s announcement supports those goals,” Gary Loveman, chairman and CEO of Caesars Entertainment, said.
The effort is part of an overall restructuring announced in May that eliminated more than US$1 billion in debt that was due next year while providing a different ownership structure to pieces of the company. The company recently raised $1.75 billion in new debt associated with 2015 debt retirement and paid down $800 million of debt due in 2016.
The planned spinoff would involve 44 casinos in 13 states—the largest portion of the company’s operating divisions. CEOC owns Caesars Palace, Caesars Atlantic City, Harrah’s Reno and most of the company’s regional casinos.
In May, the company sold 5 percent of the equity in CEOC to institutional investors. Parent company Caesars Entertainment retains 95 percent ownership in CEOC.
Caesars’ other major operating division is Caesars Growth Partners, which is publicly traded on Nasdaq as Caesars Acquisition Co. The business, which is 57% owned by Caesars Entertainment, includes four Las Vegas properties—The Cromwell, The Quad, Bally’s Las Vegas and Planet Hollywood—plus Harrah’s New Orleans, a 41% interest in Horseshoe Baltimore and Caesars Interactive Entertainment.
The company also operates eight resorts and the Octavius Tower at Caesars Palace under Caesars Entertainment Resort Properties. The division includes Las Vegas’ Rio, Flamingo and Paris Las Vegas, the Harrah’s resorts in Las Vegas, Laughlin and Atlantic City, and the Linq development on the Las Vegas Strip.
A financial source close to Caesars told the Las Vegas Review-Journal the company will take its time to determine when it will list shares in CEOC. Caesars could also offer creditors stock in the division as part of the restructuring.
Mr Payne has been with Caesars for 19 years, most recently in several corporate area positions. He once headed the company’s Central Division and was general manager of several properties, including Harrah’s New Orleans. Ms Higgins previously served as the CFO of Global Cash Access and was CFO of Herbst Gaming.
