Through a series of financial maneuvers, Apollo has positioned itself to salvage some of the $1.7 billion it invested in Caesars, which it took private seven years ago in a $28 billion leveraged buyout with fellow private-equity firm TPG, the Wall Street Journal reported today. The restructuring hinges on the bankruptcy of Caesars’s largest unit, which could come as soon as mid-January, and transfers of the unit’s best assets that have infuriated creditors. Apollo has engineered transfers of some of the casino chain’s most valuable properties — including a key piece of the Las Vegas Strip’s Caesars Palace — from the soon-to-be-bankrupt Caesars Entertainment Operating Co. to other Caesars affiliates. That left holders of $18.4 billion in debt owed by Caesars Entertainment Operating Co. with claims on far fewer assets. As a result, some creditors are being asked to take less than what they are owed in negotiations leading up to the unit’s chapter 11 filing, while Apollo would retain a significant interest in the gambling empire. Though its stake is currently worth only around 40 percent of what Apollo invested, according to regulatory filings, it positions the private-equity firm to share in the upside if Caesars thrives.
