Harrah’s Considering Return to Public Trading?

After struggling for several years with the debt taken on by bringing the company private, Harrah’s Entertainment executives may be examining options for returning the company to public trading. This week, the company made filings with the Securities and Exchange Commission in preparation for the sale of ten percent of the casino operator to hedge-fund manager John Paulson, according to an article in the Wall Street Journal.

Going private in 2008 raised company debt to over $23 billion. Harrah’s managed to reduce its burden to under $19 billion last year, and negotiated extensions on its largest loans until 2015. But the onerous payments and looming due dates have crippled efforts to create new revenue streams in the gaming industry.

The Paulson package is likely to bring Harrah’s over half a billion dollars in cash. Still, investment advisors think restructuring of debt a necessity under current circumstances.

“We don’t think they can grow out of their position,” Peggy Holloway, an analyst for Moody’s, told the Journal.

The registration of the shares sold to Paulson may mean those shares will be publicly traded. Harrah’s could solve much of its financial difficulty by offering the company in public trading again.

Harrah’s has been among the most receptive of the US land-based casino companies to online gambling. Creating an Internet casino presence is far less costly than developing giant destination casinos, giving Harrah’s a chance to diversify and begin revenue growth again.