Dubai World Gets a Piece of the MGM Casino Resort Project
On September 11th, 2007, Dubai World will acquire a 25% share in a multibillion dollars casino resort on the Strip by MGM Mirage Incorporated, marking another foray by the state owned investment organization in the U.S. gaming market. Under an agreement made by MGM Mirage and Kerzner International Holdings Limited, Dubai World subsidiary Istithmar will put cash equity for the project.
Just last month, Dubai World stated that they are planning to invest $5.2 billion to MGM Mirage by acquiring a 9.5 percent share and half of MGM's City Center development in the strip. MGM will own about 50% of the resort and Kerzner, the main developer of the large Atlantis Resort in the Bahamas, will get the remaining 25% of the shares.
MGM is giving about 40 acres of land to the project. The land has a value of $20 million per acre, putting MGM's contribution to the project at $800 million dollars. Kerzner is taking the lead in planning and conceptualization of the casino resort project. The opening of the casino resort is scheduled for 2012.
To help the company issue bonds for its expansion project, Dubai World is hoping for a credit rating. Chief Financial Officer Maryam Sharaf said that they are currently in the middle of rating process and documentation. Sharaf added that Dubai World would sell their bonds once they had received their rating.
Dubai, which is one of the seven emirates in the UAE, also said that they are planning a rating as they made a financial plan for the country. Dubai World recently launched a road show in Dubai for a one year $2.7 billion loan.
The establishment will be used for general corporate activities. The Syndication will close on October 1st, 2007, with the road show being held next in Hong Kong. The loan made by Dubai World is worth 85 points on the London Interbank offered for the first six months and it will be upgraded to 110 basis points for the duration of the term.
09/19/2007 02:51 PM
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