By Tracy Rucinski
CHICAGO (Reuters) - Caesars Entertainment Corp's <CZR.O> main casino operating unit has begun a process to raise up to $3.8 billion of cash needed to exit a contentious two-year bankruptcy, according to a court filing on Wednesday.
After more than a year of legal wrangling, the Caesars subsidiary last month secured support from the vast majority of its creditors for a wide-ranging plan to emerge from bankruptcy early next year.
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Now Caesars Entertainment Operating Co Inc (CEOC) is seeking financing for its reorganization plan, which entails splitting Caesars' main bankrupt unit into a casino operator and real estate investment trust (REIT), both controlled by creditors.
If the plan wins U.S. Bankruptcy Court approval at a trial set for January, CEOC must have at least $1.8 billion in new financing for the REIT and $1.2 billion for the operating company before the reorganization can become effective.
"If confirmed by the court, the plan requires that (CEOC)raise approximately $3.0 billion to $3.8 billion of cash from third-party exit financing," the company said in a filing with the U.S. Bankruptcy Court in Chicago.
CEOC filed for Chapter 11 protection in January 2015 with $18 billion of debt and allegations by creditors that its parent looted the unit prior to the bankruptcy.
The Caesars parent has promised to contribute some $5 billion to CEOC's reorganization plan in exchange for creditors dropping billions of dollars of claims.
To help fund the plan, Caesars will give creditors stock in a new group it will create by merging with another affiliate, Caesars Acquisition Co (CAC) <CACQ.O>, which in July agreed to sell its online games unit for $4.4 billion in cash.
That money could help fund the new casino operator, Caesars has said.
In its court filing, CEOC said the overall new financing is a condition to fund creditor recoveries under its reorganization plan, as well as other unspecified needs.
The casino group asked for court approval to retain financial adviser and investment banker Millstein & Co, which has worked closely with CEOC throughout its bankruptcy, to oversee the financing process.
(Reporting by Tracy Rucinski; Editing by Bernard Orr and Jonathan Oatis)