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Las Vegas Sands to Push for IPO of Macau Gaming Assets

On May 15th, 2009, Las Vegas Sands Corporation is ironing out a possible initial public offering of its gaming assets in Macau after a failed plan to sell off its casino facilities and hotels last month. Struggling under the pressure of its immense credit obligations, the organization, which manages the Sands and Venetian resort casinos in Macau, has stopped construction on some of its remaining casino projects in the face of the worldwide financial crisis and visa restriction on mainland China residents that are severely affecting the number of visitors to the gaming enclave.

A spokesperson for the organization refused to comment on the IPO plans but the person familiar with the issue stated that Sands has a appointed the Goldman Sachs Group Incorporated to manage the sale. While the potential agreement is still in its initial stage, a listing of the casino assets in Macau would likely happen in Hong Kong. Last month, the US-based casino operator decided not to push through with a sale of its casino facilities and hotels in Macau to investors because the bid were not big enough. Sands has had a challenging year.

New York Stock Exchange-listed shares of the group closed at $9.23 apiece that down, down by 88 percent from $76.01 a year earlier. The company reported a loss of $111 million for the 4th quarter of 2008, compared with a $39.9 million net income a year earlier and was forced to raise $2.1 billion through stock selling in November 2008.

The group was also forced to laid off hundreds of casino staff in Macau and watched as oficials leave the company including William Weidner and Bradley Stone, who played an important role in the group's strategy in Macau.

The Venetian casino is also about to face a new rival in the Cotai Strip of Macau that Sands has been dominating. Lawrence Ho, the son of local gaming magnate Stanley Ho, will debut his City of Dreams resort hotel on June 1st, 2009 across from the Venetian. It is expected to take some visitors away from the Venetian Macau. A Las Vegas Sands IPO in Hong Kong also would be a good signal that other options might not be an option.

Back in March 2009, Sands was preparing for a possible buyback of its existing credit, which at the end of last year totaled $10.4 billion. Sands hired Goldman Sachs to negotiate an amendment from creditors that would permit it to acquire back as much as $800 million of its debt, although at that time Mr. Adelson denied that he was planning to buy back debt.

Adelson said that two Chinese groups were interested in acquiring minority shares in the Venetian and Sands casino properties in Macau. He added that two Chinese construction groups are also interested in financing and completing parts of Sands' suspended projects in Macau.


06/03/2009 20:48 PM


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