Caesars Entertainment Corp. CEO Mark Frissora says the gaming giant has plans to expand in a big way after its largest operating unit emerges from bankruptcy reorganization later this year.
At the top of the list is more than 90 acres the company owns in Las Vegas, including land right in front of Caesars Palace on the Las Vegas Strip, and a $90 million renovation of all 1,270 rooms at the iconic Flamingo Las Vegas across the street.
“We have a lot of real estate that’s underutilized,” Frissora said in a recent interview with Bloomberg TV. “We have plans to basically develop all of that very valuable center-Strip property as soon as we emerge. Those assets will have a very high-return, low-risk profile.”
Once its balance sheet is repaired, the company also will be looking at new markets, including Japan, South Korea, Canada and Brazil, the executive said, and plans to expand its staff dedicated to mergers and acquisitions and casino development.
Non-strategic assets also are being shed, like the 300-room Conrad Punta del Este Resort and Casino in Uruguay, which has been sold to Enjoy, a major South American operator based in Chile, for $180 million.
Caesars, the largest owner of casinos in the U.S., has struggled under a mountain of debt since a $30 billion leveraged buyout in 2008. In January of 2015, the company put its largest division, Caesars Entertainment Operating Co., into bankruptcy.
As part of the restructuring, CEOC will split into a real estate investment trust that will own its casinos, and an operating company to lease and manage them. Debt and other obligations will be reduced to $14.6 billion from $23.5 billion prior to the bankruptcy filing, the company said. Fixed costs, including interest expense and rent, will decline to $1.28 billion annually from $2.67 billion three years ago.
“We are excited because we have a lot of growth plans we’ve not been able to act on because of the complicated structure” of Caesars, Frissora said. “Once we emerge, we will be able to do a lot of development projects around the world as well as M&A activity.”
