Casino firm seeks $400m to weather the downturn
Posted by Gavin Smith on 04 Aug 2009 at 14:08
A huge $400 million in short-term funding is the goal of Las Vegas Sands as it looks to ride out the economic storm, according to reports.
Calida Gaming says the company is also looking to revive its construction plans in Macau, China.
The firm is planning to sell convertible bonds with a coupon as high as 16 per cent, connected to reported aims of raising $2.5 billion through a Hong Kong IPO of the company's Macau interests in 2010.
According to Calida Gaming, investors can choose to swap bonds for the shares or carry on receiving interest payments.
The company noted a $175.9 million loss for the second quarter - this includes lower than expected proceeds for the sale of the Shoppes at the Plazzo, Las Vegas, which opened at a time when the gambling hub was seeing a fall off in visitors.
About two-thirds of the company's revenue now comes from Macau, and the firm wants to drum up more funding to get building work moving again at its new hotel and casino project in the Chinese gambling haven.
Shares in the firm have gone down by 16 per cent to $5.35 in the New York stock exchange composite trading.
Work on the new complex was put to a halt in November and the firm's debt was put under review.
Moodys Investors Services have said results mean there are concerns that Las Vegas sands may not remain in compliance with financial covenants, according to Calida Gaming.
The outlook in Macao could be in for a boost soon thanks the arrival of new chief executive Fernando Chui. His installation at the helm could see China relax visa restrictions on mainland residents looking to visit the former Portuguese colony.
Although it is expected to recover quicker than Las Vegas, Macau's gambling industry is still fighting the economic downturn. Redundancies have been made and some construction projects have been cancelled altogether.
Visitor numbers are also down 11 per cent for the first half of 2009 compared to 2008, and casino revenue has slipped 12 per cent in the second quarter year-on-year.
