Hotel and casino operator Caesars Entertainment Corp. will aim for further Strip development, geographical expansion, and M&A opportunities when it emerges from bankruptcy, CEO Mark Frissora said in a recent interview with Bloomberg TV.
Caesars has embarked on a lengthy journey toward recovery after its main operating unit – Caesars Entertainment Operating Company – filed for Chapter 11 bankruptcy protection in January 2015. Precisely two years later, a Chicago Bankruptcy Court approved a proposed restructuring plan that would see the establishment of a real estate investment trust that would control a big portion of Caesars’ existing properties, including the iconic Caesars Palace. The reorganization plan would also see the casino operator rid itself of $10 billion in debt.
Mr. Frissora told Bloomberg that the company still has to receive regulatory approval in order to be able to close the burdensome bankruptcy chapter. Caesars anticipates the nod from the US Securities and Exchange Commission, among other regulators. The company’s top executive said that he expects it to emerge from bankruptcy sometime in the third quarter of 2017.
Mr. Frissora outlined three main objectives before Caesars once it exits its current state – further Strip development, international expansion, and M&A. The company is planning to develop 90 acres of “underutilized” land on the Las Vegas Strip. The executive described these center-strip assets as “very high-return, low-risk profile” ones.
As for the company’s expansion plans, Mr. Frissora said that they have several markets in mind, including Brazil, South Korea, where they hold a license for an integrated resort in Incheon, Canada, and Japan.
Japan and the legalization of casino gambling there have become a particularly hot topic over the past several months, with some of the world’s major gambling operators expressing interest in entering the market. Mr. Frissora told Bloomberg that he has recently visited the country to examine the response they have evoked with their own interest tp invest there.
The executive said that it all shows that Caesars will be welcomed in Japan and that the fact they had not invested in Macau, unlike other operators currently eyeing the Japanese market, may give them a certain amount of advantage when the call for license bids is announced. Caesars will be competing with the likes of Hard Rock International, MGM Resorts International, and Las Vegas Sands for a Japanese casino license.
Mr. Frissora also told Bloomberg that once the casino operator completes its reorganization, it will also be able to focus on M&A.
The executive revealed that despite the complicated structure and bankruptcy proceedings, the past two years have been enjoyable for the company in terms of sales and profitability. The growth was attributed to the ongoing renovation of hotel rooms on the Strip and different cost savings initiatives.
