Caesars to pursue Philippine foray despite debt woes

caesars palace

Debt-strapped American casino operator Caesars Entertainment Corp. said it still has the financial muscle to pursue its plan of putting up a casino in the Philippines, even as its largest unit teeters on the edge of bankruptcy.

But the casino license for Caesars will unlikely come until the last of four current licensees sees its casino-resort rise on Entertainment City, state-owned Philippine Amusement and Gaming Corp. (PAGCOR) said in a separate e-mail interview.

In an e-mail reply to BusinessWorld on Nov. 15, Steven Tight, Caesars Entertainment president of international development, said: “While there has been speculation about a restructuring of one of Caesars’ operating entities, it would not impact our ability to finance a project in Manila if we were granted a license.”

Caesars, America’s largest casino operator with over 50 casinos in the US and five countries, last week reported a net loss for the third quarter, but said it remains in talks with lenders and creditors to reduce its debt, which was at $24.2 billion as of June 30, according to Thomson Reuters data.

Bloomberg reported that the restructuring plan involves a prearranged bankruptcy, as soon as January, for Caesars Entertainment Operating Corp., the division that owns most of the parent’s casinos.

Mr. Tight said Caesars will pursue a Philippine license to build an integrated casino near the Ninoy Aquino International Airport, with construction targeted to start within five years.

“We are still awaiting a decision from the government on our proposal,” he said.

Asked if the American casino operator’s finances would be a concern, PAGCOR said in a statement to BusinessWorld on Nov. 16: “Discussions are only at a conceptual stage. It’s too early to think of anyone’s financial capabilities.”

The regulator said Caesars already submitted a concept proposal and met with it twice.

“In both occasions, PAGCOR disclosed that it prefers to see a substantial completion of the Entertainment City to have a better feel of the capacity of the market to absorb new supply before considering a possible 5th license,” PAGCOR said.

The four existing PAGCOR licensees are: the tandem of SM Group’s Belle Corp. and Melco Crown (Philippines) Resorts Corp. that is building the City of Dreams; Andrew L. Tan and Genting Hong Kong Ltd. that formed Travellers International Hotel Group, Inc. for Resorts World Bayshore; Enrique K. Razon, Jr.’s Bloomberry Resorts Corp., which opened Solaire Resort & Casino in March last year; and Japanese casino mogul Kazuo Okada’s Tiger Resort Leisure and Entertainment, Inc.

City of Dreams is set to open by first quarter next year; Mr. Okada’s casino resort by 2016; and Resorts World Bayshore by 2017.

(businessworld online)
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