"We have a lot of real estate that’s underutilised,” Frissora said in an 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.”
Caesars, the largest owner of casinos in the US, has struggled under a mountain of debt since a US$ 30 billion leveraged buyout in 2008. In January of 2015, the company put its largest division,
Caesars Entertainment Operating Co., into bankruptcy. It’s expected to exit in the third quarter.
The company has enjoyed growth in sales and profit over the past two years, due in part to a strategy of renovating hotel rooms and searching for cost savings in places ranging from parking lots to guest check-in.
As part of the bankruptcy restructuring, Caesars is creating a real estate investment trust that will own many of the company’s casinos, including the flagship Caesars Palace in Las Vegas. Debt and other obligations will be reduced to US$ 14.6 billion from US$ 23.5 billion in 2014, the company said. Fixed costs, including interest expense and rent, will decline to US$ 1.28 billion annually from US$ 2.67 billion three years ago.
Caesars has reduced promotional costs, like the amount of free casino chips it gives customers, while maintaining its market share in key cities, Chief Financial Officer Eric Hession said. The company has cut US$ 800 million in annual expenses over the past two years.
Source: GMB / Bloomberg
