(PRNewsFoto/BestOfVegas.com)
After Las Vegas Sands Corp. (LVS) severed a cash shortage, the company begin to seeks funding to stave off defaulting on loans while the company is facing ``substantial doubt'' about its ability to survive as a going concern.
Sheldon Adelson, the billionaire who controls Las Vegas Sands, is in talks with Singapore's government and banks in Hong Kong. The Cash shortage threatens $16 billion of casino developments in Asia, according to a person with knowledge of the meetings.
The Las Vegas Sands' declining revenue was due to declining in consumers spending on the Vegas Strip and restrictions on visas in Macau. China increased visa restrictions on some mainland residents traveling to Macau, causing casino gambling revenue in the former Portuguese colony to fall 10 percent to 26 billion patacas ($3.26 billion) in the third quarter.
Yesterday's filing raised concerns that dwindling cash flow may jeopardize $16 billion of casino developments in Macau, China, and Singapore, where Las Vegas Sands seeks to cater to wealthy Asian gamblers. Restrictions on Chinese who want to visit Macau may damp gambling revenue in the city where the company operates Asia's biggest casino resort.
The casino owner, which had $8.8 billion in long-term debt at the end of June, said in a regulatory filing that it probably won't meet lenders' requirements unless it cuts spending on developments, boosts earnings at its Las Vegas Strip casinos and raises more capital. The Lenders have also suggested that Las Vegas Sands sell shares or convertible bonds.
Yesterday's admission came after the 75-year-old Adelson, who holds a stake of more than 64 percent, invested an additional $475 million in September to avoid violating the terms of a loan. He hired an unidentified investment bank to raise more capital with his help.
The casino owner said it doesn't expect to meet a maximum leverage ratio covenant in the fourth quarter. That would trigger defaults that might force it to suspend development projects and ``raise a substantial doubt about the company's ability to continue as a going concern,'' Las Vegas Sands said in the filing.
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Sources :
- The International Herald Tribune: Cash-starved Las Vegas Sands seeking help in Asia, November 7, 2008
Bloomberg: Las Vegas Sands' Adelson Said to Meet With Singapore (Update2) November 6, 2008 22:04 EST
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1 comment:
Now is the time to renegotiate with Singapore and Chinese to ensure you continue with development activities. Mr. Adelson knows the drill. Fear of pulling out, will cause politicians to cater to Mr. Adelson's new demands and concessions.
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