An affiliate of casino giant Caesars Entertainment Corp., which is in danger of following its biggest unit into bankruptcy proceedings, is considering a sale of its fast-growing mobile- and social-games business, Dow Jones Newswires reported on Friday. Caesars Entertainment's interactive unit is working with investment bank Raine Group LLC to evaluate unsolicited bids that have exceeded $4 billion. Suitors include financial firms and gaming, media and entertainment companies. Caesars Interactive Entertainment, or CIE as the unit is known, is one of the largest online, mobile- and social-gaming companies, with annual sales of nearly $800 million. It notched year-over-year revenue growth of 28.8 percent in the first quarter.
Teen apparel retail chain Aéropostale, which filed for chapter 11 protection earlier this month, has reached a settlement with supplier MGF Sourcing that — if approved by a bankruptcy judge — should have inventory flowing back into stores and remove some acrimony from the proceedings, the New York Business Journal reported on Friday. New York-based Aéropostale had claimed that MGF Sourcing, which is owned by Aéropostale’s biggest lender, Sycamore Partners, placed stricter payment terms to force the retailer into bankruptcy. MGF had called the allegations “frivolous.” If the agreement is approved by Bankruptcy Judge Sean Lane at a May 23 hearing, the final MGF deliveries to Aéropostale stores will start that day, Aéropostale attorney Jacqueline Marcus said. After the delivery happens and payments are made, the two companies will end a relationship that stems from a 10-year sourcing agreement they signed two years ago. At the time New York-based Sycamore took an 8 percent stake in the retailer and provided a loan, with the MGF supplier agreement part of the deal.
Sports Authority Holdings Inc. will head to auction next week with bids in place from two groups of liquidators plus smaller offers from rivals Dick’s Sporting Goods Inc. and Modell’s Inc., the Wall Street Journal reported today. However, the bids from Dick’s and Modell’s were considered “disappointing” and for fewer stores than initially expected. Dick’s, which one equity analyst said could make an offer for 180 stores, instead placed a bid for less than 20 stores; Modell’s made an offer for a small handful of stores. Meanwhile, two groups of liquidators placed bids on the struggling sports retailer’s assets. A consortium of Hilco Global, Tiger Capital Group and Gordon Brothers Group made an offer. Another bid came in from a liquidator group that includes SB Capital Group, Great American Group and 360 Merchant Solutions.
The wave of U.S. oil and gas bankruptcies surged past 60 last week, an ominous sign that the recovery of crude prices to near $50 a barrel is too little, too late for small companies that are running out of money, Reuters reported on Friday. Exco Resources Inc., a Dallas-based company with a star-studded board, said on Friday that it will evaluate alternatives, including a restructuring in or out of court. Its shares fell 35 percent to 62 cents each. Exco's notice capped off one of the heaviest weeks of bankruptcy filings since crude prices nosedived from more than $100 a barrel in mid-2014. Prices have bounced back to $46 a barrel from February lows in the mid-$20s, but the futures market shows investors do not expect U.S. benchmark crude to rise above $50 for more than a year. Bankruptcy filers last week included Linn Energy LLC and Penn Virginia Corporation. Struggling SandRidge Energy LLC, a former high flyer once led by legendary wildcatter Tom Ward, said it would not be able to file quarterly results on time. Read more.
SandRidge Energy Inc. and master limited partnership Breitburn Energy Partners LP filed for chapter 11 protection today, the latest U.S. oil and gas companies to fall victim to weak oil prices, Reuters reported. SandRidge said in a court filing that it had total assets of $7.01 billion and total debt of $4 billion as of March 31. Breitburn listed assets and liabilities of $1 billion to $10 billion. SandRidge, which has been in talks with creditors on a restructuring deal, said on Wednesday it would not be able to file financial results for the quarter ended March 31 on time.
Vanguard Healthcare, a Brentwood, Tenn.-based operator of skilled nursing and rehab facilities, has filed for chapter 11 protection, the Nashville Business Journal reported today. The company said that the petition to restructure its debt, filed May 6, "comes after months of working unsuccessfully to restructure unfavorable loan terms with a single lender." There are two filings associated with the company, one referring to Vanguard Healthcare and the other referring to Vanguard Healthcare Services. Both describe the company as having between $50 million and $100 million in liabilities and between $100 million and $500 million in assets. The first filings lists $28,551 in claims against the company, the largest ($22,287) from a West Virginia law firm. The second lists $254,074 in claims, the largest ($41,185) from a California investment bank. Read more.
A unit of TerraForm Global Inc. has 90 days to issue its delinquent annual report or it could face demands to pay off hundreds of millions in debt six years early, partly because bankrupt parent SunEdison Inc. hasn’t filed its own financial statement, Bloomberg News reported today. Holders of bonds issued by TerraForm Global Operating LLC sent a notice of default on the yieldco’s 9.75 percent senior notes due in 2022, according to a statement Wednesday from their law firm, Willkie Farr & Gallagher. The group represents more than 25 percent of aggregate principal of the notes, according to the firm, which said failure to remedy the problem in 90 days would constitute an “event of default.” If that happens, bondholders could demand payment in full, said Julia Winters, a bankruptcy analyst at Bloomberg Intelligence. There’s $760.4 million outstanding on the issue, according to data compiled by Bloomberg. The bondholders “remain committed to continuing an open dialogue and working productively with the company toward a resolution in the interests of all stakeholders,” according to Willkie’s statement. Read more.
In related news, SunEdison Inc. terminated the employment of Chief Financial Officer Brian Wuebbels and said that it would delay filing its 10-Q report for the quarter ended March 31. The company said it has given Wuebbels a 30-day notice period, during which he will be an adviser to the company's Chief Restructuring Officer, John Dubel. The company filed for chapter 11 protection in April after a short-lived but aggressive binge of debt-fueled acquisitions that proved unsustainable. Read more.
Power generator NextEra Energy Inc. has renewed its interest in buying Oncor Electric Delivery Co., as a rival takeover deal shows signs of unraveling, Bloomberg News reported yesterday. NextEra made its position known after Oncor parent Energy Future Holdings Corp. replaced its bankruptcy reorganization plan on May 1. Under the original plan, its most-profitable business would have been sold to a group led by Hunt Consolidated Inc. While that possibility still exists under the new structure, the change freed Oncor up to be pursued by other bidders, Chief Executive Officer Robert Shapard said at a Texas regulatory hearing May 4. “We are to work with all parties interested in buying the company at this point,” Shapard said at the hearing. An Energy Future lawyer mentioned a “third party indication of interest” in Oncor in a court hearing on an unrelated matter May 10. The lawyer did not elaborate. Juno Beach, Florida-based NextEra’s interest in Oncor is likely driven by its growth potential, due to increased demand expectations in the Texas market, Julien Dumoulin-Smith, a UBS Group AG analyst in New York, wrote in a note to clients yesterday. Growth may also be driven by the need for more spending to address coal-fired power plant retirements, he wrote.
