Source: Las Vegas Sands to detail plans next week

Associated Press

Friday, Nov. 7, 2008 | 4:21 p.m.

Casino giant Las Vegas Sands Corp. will detail its plans to handle its debt crisis early next week, according to a person close to the company, a development that may ease bankruptcy worries and could include another capital infusion by billionaire founder Sheldon Adelson.

The person did not elaborate and requested anonymity because the plan had not been finalized.

The company told the Securities and Exchange Commission in a filing Thursday that it may violate promises it made to lenders and default on $3.8 billion in debt loans Dec. 31 if its operating earnings this calendar year don't equal at least 13 percent of that amount. The debt at issue is a credit facility secured by the company's Palazzo and Venetian casinos in Las Vegas and an attached mall and convention building.

A default could set off the company's collapse.

Las Vegas Sands said it has four options: It could boost earnings in Las Vegas, which likely would require big cost cuts and might result in layoffs. Or the parent company could cut spending on development around the world, raise financing to reduce the debt of the Las Vegas operations or contribute up to $50 million in capital to the Las Vegas operations, or a combination of all four.

As of December 2007, the company had $9.21 billion in long-term debt.

The company has an ace in the hole in the form of deep-pocketed founder and chief executive Adelson, 75, who with his wife Miriam Adelson, controls 67 percent of the company's shares.

In March 2006, Adelson raised $2.18 billion in cash by selling 180.8 million shares at $49.14 each. The Adelsons personally loaned the company $475 million this fall to avoid a funding crunch, and it is unclear how much cash the couple has left.

In an October interview with The Associated Press, Adelson said Las Vegas Sands was looking to raise $2 billion in debt financing from Asian banks to finish work on some Macau expansion projects.

The company also said last month that the Adelsons intend to participate in a capital raising program, along with an unnamed investment bank, but didn't reveal details.

In related developments, Las Vegas Sands said Friday it hired a new chief financial officer, CB Richard Ellis Group Inc. CFO Kenneth Kay, to start Dec. 1.

It also said officials from the Singapore government and senior executives from the resort developer met to discuss the completion of the proposed $1.4 billion Marina Bay Sands resort in Singapore amid continued concern about tightness in the credit markets.

Las Vegas Sands said those discussions included construction and marketing efforts to bring more conventions and exhibitions to Singapore.

"In light of recent turmoil in the global markets, I felt the need to personally reaffirm our commitment to the success of Marina Bay Sands," Adelson said in a statement Friday.

The Singapore government's support of the project "remains strong," he said, and he noted the casino could expand the number of table games to up to 1,000, from the original 600 planned.

The chief executive of Southeast Asia's biggest bank, DBS, on Friday told Reuters that Las Vegas Sands Corp. hadn't given signs of financing problems at its project in Singapore.

"There's been no default, no indication of default. The project is still going along," CEO Richard Stanley said. "I do expect there will be an integrated resort in Marina Bay in Singapore in 2010."

Morgan Stanley analyst Celeste Brown said Las Vegas Sands had never been in danger of defaulting on its loans in Singapore but that the increase in tables could make it easier to raise finances with the promise of higher returns.

"In terms of the Singapore default, we were never concerned with the Singapore credit facility, Las Vegas Sands' covenant issues are associated with its U.S. loans," she wrote in a note.

Shares in Las Vegas Sands fell 82 cents, or 10.5 percent, to close at $7.03 on Friday. On Thursday, the stock fell $3.81, or 33 percent, to $7.85 _ more than 93 percent below the top end of its 52-week range, $122.96, which it hit Dec. 10 last year.