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Harrah’s may be one of the most recognizable names in the gambling sector. The company, however, is in some serious financial trouble according to Moody’s, which issued this warning last week:
Harrah’s management seems more interested in jump-starting growth initiatives than in reducing debt… In announcing the separate debt-for-equity investment with equity sponsors and a hedge fund, Harrah’s said the equity injection will be used for “further balance sheet optimization and strategic investments.” So it appears to us that Harrah’s will not use much of the expected equity investment to reduce debt.
Pehub.com points out that Harrah’s annual interest burden consumes a whopping 90% of property income.
In its report, Moody’s sort of implies that Harrah’s current owners, Apollo Management and TPG Capital, are nothing more than “degenerate gamblers”.
Harrah’s owns the World Series of Poker.
Aaron Goldstein, Gambling911.com
