Chile – Enjoy could pay off Caesars debt this monthBy Phil - 2 May 2017
Chilean operator Enjoy has taken on a public bond in the Unites States in order to finance the purchasing of the remaining 55 per cent of the Conrad Punta del Este Resort.
The debt is equivalent to about US188m plus interest. Since December 31st the company has been accruing interest on the debt it owes Caesars and has until May 30th to pay the payment according to the company’s President Javier Martinez, following an ordinary shareholders meeting held last week.
Enjoy CEO Gerard Cood said: “We had a couple of alternatives, and we made the decision to go the way of a public bond in the US. We are supported today by four banks, which are two major international banks, Morgan Stanley and Credit Suisse, who play a more important role, and then BTG (BTG Pactual) with BBVA.” The bond was launched Wednesday, implying that debts could be paid before the end of May.
The company has already started selling disposable assets as one of the mechanisms to generate profits within the next two years. Last month the company informed Chile’s securities and insurance regulator (SVS) of if its intention to sell off of its 40 per cent ownership of the Casino de Colchagua located in Santa Cruz. Cood explained that the company had marked out a number of certain expendable assets, and that the sell off was part of larger policy as the firm aimed to strengthen its position as an entertainment chain and was looking at non gaming options such as hotels and gastronomy.
In a letter published last month in Enjoy’s 2016 Annual Report Martínez said that while the Enjoy owned Conrad hotel had recorded a good performance the drop in gaming income over the summer of 2016 is a “shortfall” which will be difficult to recover. However according to Mr Martínez the last quarter showed “good prospects” for 2017 once the Argentine market recovers and visitor numbers begin to increase once again to the Uruguayan resort.
In March 2013 the Uruguayan government approved a deal where the current operator of the Conrad hotel and casino in Uruguay would switch from Baluma SA to Enjoy SA meaning that Enjoy took control over the Conrad. The deal was first announced in November 2012. The company currently operates ten casinos in Latin America, 6,824 slot machines 367 gaming tables and 508 bingo seats. Enjoy’s casinos recorded more than 6 million visitors in 2016. According to the latest report, in terms of gross income Enjoy is the market leader in Chile with 39.08 per cent of market share.