Company reducing capital expenditures in 2000

Tuesday, March 28, 2000 | 10:52 a.m.

MGM Grand Inc. said it plans to reduce its capital expenditures by a third in 2000, the result of the completion of its "City of Entertainment" expansion project.

MGM Grand plans to spend about $250 million on capital expenditures this year, according to its annual report. That's down from $375 million in 1999, and $362 million in 1998.

MGM Grand announced the City of Entertainment project in 1996. The $570 million project was substantially completed last year, with the final large parcel, the $170 million "Mansions at MGM Grand," opening in June. The 29-villa Mansions are aimed at the MGM Grand's wealthiest customers.

In 2000, MGM Grand anticipates spending about $6.2 million on land acquisitions and pre-construction activity related to its planned project in Atlantic City. MGM Grand also said capital expenditure requirements may rise in 2000, depending on the maintenance needs of the portfolio it will acquire from Mirage Resorts Inc. These expenses are expected to be covered by cash flow from operations, bank debt and cash on hand, MGM Grand said.

MGM Grand has a definitive agreement to acquire Mirage Resorts for $6.7 billion. That acquisition may close as soon as mid-2000.