NEW ORLEANS -- Caesars Entertainment Corp. is selling Harrah’s New Orleans and three other casino properties for about $1.8 billion to a separate unit that it controls as the company restructures its debt.
The sale of Harrah’s and the three Las Vegas Strip properties is valued by the company at about $2.2 billion, when debt and renovations at the Quad Resort & Casino are included. The Quad was formerly Imperial Palace. The other assets include Bally’s Las Vegas and The Cromwell, which will open later this year and was formerly known as Bill’s Gamblin’ Hall & Saloon.
Caesars Growth Partners, which was set up last year to help Caesars Entertainment manage its debt and pursue other opportunities, will own Harrah’s New Orleans and the three Strip casinos. Caesars Entertainment owns a 58 percent stake in Caesars Growth Partners. Private equity firms Apollo Management LP and TPG Capital LP own the rest.
Caesars Acquisition Co. expects the deal to close in the second quarter. Caesars Entertainment will manage the properties.
Harrah’s Entertainment changed its name to Caesars Entertainment Corp. in 2010 to capitalize on the name of the company’s most famous casino, Caesars Palace.
The deal prompted Moody’s Investors Service to put Caesars Entertainment Operating Co. Inc.’s ratings on review for downgrade. The rating agency said the sale by its parent company will provide the company with the cash it needs to fund its operating losses, but is an overall negative move for its credit profile.
Moody’s said given Caesars Entertainment Operating Co.’s total debt load of nearly $21 billion, there needs to be a major reduction of debt to offset the lost income from the properties.
Caesars Entertainment Corp. said Monday that it expects a deeper net loss of between $1.7 billion and $1.82 billion in the fourth quarter on about $2.05 billion to $2.11 billion in revenue.