NEW YORK (TheStreet) -- Shares of Caesars Entertainment Corp. (CZR) are up 7.06% to $19.87 in pre-market trade after the company announced that it's selling a minority interest in its largest unit, a step that removes guarantees by the casino company on much of its $23 billion of debt and sets the stage for a wider restructuring, Bloomberg reports.
The company is selling a 5% stake in Caesars Entertainment Operating Co. to unnamed investors, according to a statement.
Caesars agreed to pursue a stock exchange listing for the unit.
The sale means some bond investors will no longer hold a claim to the parent company's assets and will have less bargaining power in debt restructuring negotiations. The company was purchased in 2008 in a $30.7 billion leveraged buyout led by Apollo Global Management LLC (APO) and TPG Capital, Bloomberg noted.
TheStreet Ratings team rates CAESARS ENTERTAINMENT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate CAESARS ENTERTAINMENT CORP (CZR) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."