Agreement on Caesars merger clears way for emergence from Chapter 11

The terms of a merger of two subsidiaries of Caesars Entertainment have been amended, clearing a path for the company’s emergence from Chapter 11 bankruptcy protection.

In a filing with the Securities and Exchange Commission Tuesday, the company reported new terms for the merger of Caesars Entertainment Corp. and Caesars Acquisition Co.

The amendment is a milestone toward launching the New Caesars and completing Caesars Entertainment Operating Company, Inc.’s court-supervised restructuring process. The New Caesars will result from the combination of Caesars Entertainment and Caesars Acquisition.

Under the amended agreement, Caesars Acquisition shareholders would receive 1.625 shares of Caesars Entertainment for each share they hold.

The merger terms were negotiated by special committees composed of independent directors of the boards of Caesars Entertainment and Caesars Acquisition.

The deal is subject to regulatory and shareholder approval.

Separately, Caesars Entertainment, Caesars Entertainment Operating and its Chapter 11 debtor subsidiaries announced Tuesday that the operating company has entered into committed financing agreements, another key development in the company’s restructuring.

The operating company, which oversees the company’s casinos, filed for bankruptcy protection in January 2015, spurring lengthy battles in U.S. Bankruptcy Court in Chicago between the company and creditors. Last month, U.S. District Judge A. Benjamin Goldgar approved the company’s reorganization plan, which cuts $10 billion of the company’s $18 billion in debt and puts the merged company on course to operate both casinos and hotels.

Last week, Caesars reported a net quarterly loss of $435 million — 10 times more than analysts projected — compared with a net loss of $39 million in the same quarter in 2015. Most of the loss, $426 million, was attributed to the accrual of restructuring costs. Company revenue increased 2.8 percent to $3.9 billion and cash flow increased 8.6 percent, to $1.1 billion compared with a year ago.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.