Las Vegas Sands Corp still behind Macau casino

by Howard Stutz
Las Vegas Gaming Wire

LAS VEGAS, Nevada –- Las Vegas Sands Corp. executives used Wednesday's topping-off ceremony for the casino operator's $5.5 billion resort in Singapore
The Sands Macau  to announce intentions to restart development of the company's projects in Macau.

Chairman and Chief Executive Officer Sheldon Adelson said the company was exploring alternatives to raise between $3 billion and $4 billion to restart construction of several hotel-casinos on Macau's Cotai Strip. He made the comments following a ceremony to top off the three 55-story hotel towers at Marina Bay Sands.

One possibility, Adelson said, was an initial public offering through the Hong Kong financial markets that would spin off the company's Macau assets.

"We're actively, aggressively, sincerely looking at an IPO," Adelson said at a news conference in Singapore. "We're talking to investors about putting in large amounts of equity and we're also talking to banks about project financing."

Las Vegas Sands operates The Venetian and Palazzo on the Strip as well as the Sands Macau, Four Seasons Macau and The Venetian Macau. It halted development of its Cotai Strip projects in November when the company ran into financial trouble due to the failing credit markets.

Several of the projects, including a Shangri-La/Traders hotel, an 1,800-room Sheraton hotel and three casinos, were scheduled to open this year. The work stoppage caused the company to lay off 11,000 Chinese construction workers.

The Cotai Strip was the centerpiece of Las Vegas Sands' plans to spend $12 billion in Macau to build more than 20,000 hotel rooms.

The company went through a $2.1 billion recapitalization in November, but didn't restart its Cotai efforts. Instead, the company concentrated on completing the $675 million Sands Bethlehem in Pennsylvania and continued work on the Marina Bay Sands in Singapore.

Adelson said Las Vegas Sands is also looking to sell retail stores in The Venetian Macau, as well as condominiums and retail in the Four Seasons.

"We are shooting for a restart of the Macau project before the end of this year," Adelson said.

Aaron Fischer, a Hong Kong-based analyst for CLSA, said an IPO in Hong Kong might be promising.

"If we look a little further out, I think the Macau growth story will be back on track," he told The Associated Press.

Union Gaming Group principal Bill Lerner said Las Vegas Sands is probably exploring several ways to set up the IPO, including a spin-off of the Macau assets into a separate company.

He thought an IPO in Hong Kong might help boost the share price of Las Vegas Sands on the New York Stock Exchange because some of the funds could be used to pay down debt in the United States. The company could be at risk, he said, of violating its debt covenants this fall.

"Raising capital is viewed as a positive," Lerner said. "The proceeds can help address issues here."

Shares of Las Vegas Sands closed Wednesday at $6.65, down 25 cents, or 3.62 percent, on the New York Stock Exchange.

Adelson was in Singapore for the completion of the three hotel towers at the Marina Bay Sands. He said the hotel, casino and entertainment complex would open in January or February instead of December as the company predicted this year. He said the opening is being delayed because of problems sourcing construction materials.

"We can't control the flow of sand to make concrete, the availability of steel or the availability of labor," he said.

Construction of the Sands SkyPark atop the towers is the next critical phase of construction. The contractor will hoist the 7,000-ton structure 200 meters to the top of the towers using technology used in building bridges.

When completed, the Sands SkyPark will be longer horizontally than the Eiffel Tower is tall and will be the largest cantilevered public observation deck in the world.

The Marina Bay Sands was Singapore's first casino project to be awarded in 2006 when the city-state decided to allow casino gaming as a way of increasing tourism. Gaming is just a small part of the resort and the Marina Bay Sands will include 2,600 hotel rooms, convention space, retail and dining attractions and a performing arts facility.

A second casino, Resorts World at Sentosa, is being built by Malasyia-based Genting International. It is scheduled to open in early 2010 and will feature an aquarium with 700,000 fish and a Universal Studios theme park.