KEY POINTS:
Sheldon Adelson, the billionaire who controls Las Vegas Sands, is said to have held talks with the Singapore Government this week as the casino company struggled with a cash shortage that threatens a US$4 billion ($6.78 billion) casino development there.
Las Vegas Sands was seeking funding to stave off defaulting on loans while facing "substantial doubt" about its ability to survive as a going concern, the casino owner said yesterday in a filing.
An anonymous source said Las Vegas Sands and Government officials would publicly pledge to complete the project in Singapore.
Las Vegas Sands plunged in New York trading on Thursday, posting its biggest drop since going public in 2004 after saying it might default on loans arranged by Citigroup, Goldman Sachs and Lehman Brothers.
The company, which had US$8.8 billion in long-term debt in June, said in a regulatory filing that it probably would not meet lenders' requirements unless it cut development spending, boosted its casino earnings on Las Vegas Strip and raised more capital.
The Las Vegas company's dwindling cash flow might jeopardise US$16 billion of developments in Macau, China, and Singapore, where Las Vegas Sands is building resorts for wealthy Asian gamblers.
Las Vegas Sands spokesman Ron Reese declined to comment on any negotiations.
The Singapore Tourism Board said it had nothing to add beyond a statement on October 29, when it said it was in talks with Las Vegas Sands to "facilitate the success" of the Marina Bay Sands project.
The casino owner is also building the US$800 million Sands Bethworks in Bethlehem, Pennsylvania, and a US$600 million condominium complex in Las Vegas. Bethlehem's Mayor, John B. Callahan, said yesterday that Las Vegas Sands suspended work on construction of a hotel, conference centre and mall to speed up completion of the casino there.
Las Vegas Sands dropped US$3.81, or 33 per cent, to US$7.85 on Thursday in New York Stock Exchange composite trading, the biggest decline since its initial share sale in December 2004.
The shares have lost 92 per cent of their value this year amid concerns about falling casino winnings and the global financial meltdown.
Spending declines on the Vegas Strip and visa restrictions in Macau have stemmed the flow of cash into Las Vegas Sands.
Adelson, 75, who holds a stake of more than 64 per cent, invested an additional US$475 million in September to avoid violating the terms of a loan. He hired an unidentified investment bank to raise more capital.
The casino owner said it did not 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".
- BLOOMBERG