(REUTERS) – Caesars Entertainment Operating Co (CEOC), the main operating unit of Caesars Entertainment Corp, said it would file for Chapter 11 bankruptcy protection by mid-next month to cut its burgeoning debt.
The proposed transactions will reduce CEOC’s debt to $8.6 billion from about $18.4 billion, the company said.
Other units, including Caesars Entertainment, Caesars Entertainment Resort Properties and Caesars Growth Partners, will not be part of the court-supervised process, CEOC said.
Caesars has been negotiating with creditors over its efforts to restructure operations. CEOC said on Monday it would not pay $225 million in bond interest payments, triggering a default on its debt.
The agreement announced on Friday has been signed by all members of its first lien noteholder steering committee, the company said.
CEOC said it would split its U.S.-based assets into two companies – an operating entity and a publicly traded real estate investment trust that will own a newly formed property company.
These steps will slash its annual interest expense by 75% to about $450 million. Caesars Entertainment will contribute up to $1.45 billion in cash to CEOC for the restructuring, CEOC said.
Shares of Caesars, valued at $1.90 billion, closed up 2.4% on the Nasdaq on Friday. The stock has fallen about 1% since Nov. 13, the day before Caesars’ said CEOC would need restructuring.