Tuesday, November 11, 2008

Sands Holds Macau Project

Source : The Straits Times, Nov 11, 2008

# To suspend Macau construction
# Posts net loss of US$32.2 million
# 14 US cent loss a year ago
# Expects to announce US$2 billion bond sale

LOS ANGELES - CASINO operator Las Vegas Sands, which warned last week it was in danger of violating loan agreements, said on Monday it would suspend construction in Macau as it copes with a lack of financing options.

Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income. -- PHOTO: REUTERS

Sands also reported a narrower third-quarter net loss and said it expects to shortly release details of a US$2 billion (S$3 billion) bond sale.

'We have elected to significantly slow the pace of our development activities on the Cotai Strip (in Macau)... as we focus our current efforts on maximising our cash flow and our returns on invested capital from our existing properties in Macau,' Chief Operating Officer William Weidner said in a statement.

Majority-owner Chairman and Chief Executive Sheldon Adelson, speaking on a conference call, said the Macau government may act to help find financing for the projects.

The company also said it would suspend work on the St Regis luxury-condominium project in Las Vegas and would focus on the casino components at its Bethlehem, Pennsylvania development.

It still expects the Marina Bay Sands project in Singapore to open next year.

The Las Vegas-based company posted a net loss of US$32.2 million (S$48.2 million), or 9 US cents a share, compared with a net loss of US$48.5 million, or 14 US cents a share, in the year-earlier quarter.

Sands attributed the smaller loss to increases in operating income and an income tax gain, partially offset by an increase in interest expense and a decrease in other income.

After adjusting for one-time items, Sands said it earned 2 US cents a share in the quarter, well short of the 11 US cents a share expected by analysts, as compiled by Reuters Estimates.

The company said net revenue rose 67 per cent to US$1.11 billion, close to the US$1.16 billion expected by analysts.

Sagging US consumer spending power has hurt business in Las Vegas, where Sands operates the Palazzo and Venetian resorts, as well as the Sands Expo and Convention Centre.

The company operates two casinos in Macau, where officials have recently restricted travel from mainland China, and has several more projects underway there as well as in Singapore and Bethlehem, Pennsylvania.

The company said in its US Securities and Exchange filing on Monday that if it is unable to raise additional capital in the near term, it would need to consider further suspending portions, if not all, of its remaining global development projects.

The casino operator has also filed a shelf registration with regulators that would allow it to sell securities.

Shares of Sands, which have plummeted from a 52-week high of US$122,96, closed on Monday at US$8.00 on the Nasdaq only to fall in after hours trade to US$7.45. -- REUTERS

CapitaLand not in talks with Sands

PROPERTY developer CapitaLand said on Monday it has not held any talks with Las Vegas Sands over its Singapore casino-resort project, but will explore opportunities to invest in distressed assets.

The statement came after brokerage firm CIMB said in a report on Monday that CapitaLand, Southeast Asia's biggest property firm, and the Singapore government may take over the casino-resort if Las Vegas Sands fails to avert loan defaults.

Local newspapers have reported that Las Vegas Sands had held talks with the Singapore government about the project, which is targeted to open at the end of 2009.

'CapitaLand wishes to clarify that no discussion has transpired between itself and Sands,' it said in a statement.

'In the present continuing global recessionary environment, it is strategically watching the situation and studying opportunities related to distressed companies or assets, in Singapore and other core markets,' CapitaLand said.

CapitaLand is 40 per cent owned by Singapore sovereign wealth fund Temasek Holdings.

Last week Las Vegas Sands affirmed its commitment to the Marina Bay project in Singapore as investors became concerned about its fate after the casino operator's auditor said there are doubts about the company's ability to continue as a going concern -- THOMSON REUTERS

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