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Las Vegas sands in trouble = Big trouble for Singapore

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Binxuan

Binxuan

1st Gear

Las Vegas Sands Falls, Hires Bankers to Raise Capital (Update1)

 

By Beth Jinks and Carol Wolf

 

Oct. 24 (Bloomberg) -- Las Vegas Sands Corp. fell as much as 29 percent in New York trading after saying today it had hired an investment bank to raise more capital with the help of billionaire Chief Executive Officer Sheldon Adelson.

 

Adelson and his family invested $475 million in the Las Vegas-based casino operator to strengthen its capital this month and help prevent it from tripping a U.S. loan covenant. The shares have lost 94 percent of their value this year.

 

Casino cash flow is dwindling amid an economic slump and financial crisis, just as Las Vegas Sands undertakes its biggest expansion. The owner of the Venetian and Palazzo casino resorts on the Las Vegas Strip is building a $12 billion complex in Macau, China, the $4 billion Marina Bay Sands in Singapore and the $800 million Sands Bethworks in Bethlehem, Pennsylvania.

 

``With credit markets in turmoil, investors believe Las Vegas Sands is in jeopardy of running out of cash and going bankrupt,'' Steven Wieczynski, a Baltimore-based analyst with Stifel Nicolaus, said in a report today. ``Management has done nothing to assure investors the company will emerge from this financial crisis.''

 

More details on the plan to raise capital will be disclosed ``in the very near future,'' the company said in the statement.

 

Las Vegas Sands' spokesman Ron Reese declined to comment further.

 

Ranking Lost

 

Las Vegas Sands fell $1.89, or 23 percent, to $6.32 at 4:01 p.m. in New York Stock Exchange composite trading. In the past month, it was usurped as the world's largest casino company by market value. Wynn Resorts Ltd. is now the biggest, followed by MGM Mirage.

 

Sands said Oct. 22 it would sell its Four Seasons apartment hotel in Macau as a co-operative and seek to sell the attached mall space to pay down debt and help fund expansion, after Macau's government approved a legal separation of the Four Seasons from the rest of Sands' developments.

 

On Sept. 30, the company said that Adelson and his family purchased convertible senior notes that mature in 2013 and pay 6.5 percent cash interest. The notes are convertible to common stock at a price of $49.65.

 

Moody's Investors Services Inc. initiated multiple creditworthiness reviews of companies with business on the Las Vegas Strip, where gambling revenue dropped 6.7 percent in the first eight months of the year.

 

Worst Annual Decline

 

The Strip is ``on track'' for its worst annual decline since data started being compiled in the mid-1980s, the Nevada Gaming Control Board senior analyst Frank Streshley said today in an interview. It will probably surpass the 2.1 percent revenue fall in 2001, he said.

 

Competition has also intensified in Macau, the only part of China where casino gambling is legal. As more casinos and hotels are developed, authorities are limiting visits by mainland Chinese gamblers to Macau, which overtook the Vegas Strip as the world's biggest gambling hub in 2006.

 

Adelson, 75, had suggested he may step in during Las Vegas Sands' last earnings call. He owns more than 64 percent of Las Vegas Sands, according to data compiled by Bloomberg.

 

For Related News: Casino news: NI CNO Most-read Macau gaming news: MNI MACAU CNO Top consumer and retail stores: TOP CON

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Scenic98

Scenic98

Clutched

quietly, they may give soft loans to Sands. It's a face issue now....all the talk about IR blah blah blah. Then spin a new story to take money from you and me in the form of indirect taxes.

 

they may let the building delay, but not fail.

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