Facebook
Fark
Digg
Reddit
Stumblegaming:
MGM Mirage may leave New Jersey in dispute over Macau partner
Bloomberg News file
Casino billionaire Stanley Ho and daughter Pansy Ho attend a groundbreaking ceremony for an MGM Mirage casino in 2005 in Macau.
Published Monday, Feb. 8, 2010 | 7:21 a.m.
Updated Monday, Feb. 8, 2010 | 3:47 p.m.
Sun Archives
- MGM Mirage disputes N.J. regulators’ authority to vet its partner in Macau (2-1-09)
- New Jersey could come between MGM Mirage, Macau (12-29-09)
- MGM Mirage executive Gary N. Jacobs resigns (12-18-2009)
- Las Vegas Sands moves forward with Macau project (11-11-2009)
- N.J.: MGM Mirage should ‘disengage’ from Macau partner (5-19-09)
- MGM Mirage, Boyd gaming license investigation reopened (7-31-09)
- Ho, MGM Mirage deal should pass regulators (7-19-05)
- MGM Mirage talks continue in Macau (2-10-04)
Sun Coverage
MGM Mirage today said it’s in talks that could result in the sale of its stake in the Borgata hotel-casino in Atlantic City in order to settle an investigation by New Jersey regulators into the suitability of its partner in the Chinese region of Macau.
The New Jersey Division of Gaming Enforcement in May found Pansy Ho to be unsuitable because of alleged organized crime ties of her father, Chinese casino operator Stanley Ho.
The New Jersey agency recommended MGM Mirage disassociate itself from Pansy Ho if it wanted to continue operating in New Jersey. That could have required MGM Mirage to sell its stake in the MGM Grand Macau in the world's largest gambling market. Nevada regulators earlier approved MGM Mirage's arrangement with Pansy Ho.
Las Vegas-based MGM Mirage could fight the New Jersey recommendation by taking the issue to hearings before the New Jersey Casino Control Commission -- but instead is in settlement talks that could result in its departure from the New Jersey market.
Boyd Gaming Corp. of Las Vegas, MGM Mirage's partner in Borgata, would be a likely buyer of its partner's stake but has declined comment on the issue.
MGM Mirage said in a statement today "it is currently involved in constructive settlement discussions with the DGE (Division of Gaming Enforcement), which have centered on the company placing its 50 percent ownership interest in the Borgata Hotel Casino & Spa and related leased land in Atlantic City into a divestiture trust for which MGM Mirage would be the sole economic beneficiary."
"While no definitive settlement with the DGE has been reached, the company has asked its lenders to consent to the trust arrangement. Any settlement is subject to both DGE and CCC (Casino Control Commission) approval," the statement said.
The placement of the properties into a "divestiture trust’’ could put them on the path to being sold, should the settlement be reached with New Jersey regulators.
"We disagree with the New Jersey Division of Gaming Enforcement's recommendation to the Casino Control Commission concerning our Macau partner, but believe pursuing a settlement with the DGE represents the best course of action for our company and its shareholders," MGM Mirage Chairman and Chief Executive Jim Murren said in the statement. "We would like to put this matter behind us and move forward with the compelling growth opportunities we have in Macau."
Separately, the company said it's proceeding with plans to match cash flow projections with coming debt payments by extending the repayment dates for some of its $12.9 billion in debt.
The company is seeking amendments to $5.55 billion of senior credit facilities that would extend the maturity of a substantial portion of the debt from Oct. 3, 2011, to Feb. 21, 2014. The company has asked lenders to provide their final approvals of the transaction by Feb 24.
Lenders approving the proposed amendments would receive prepayments of at least 20 percent of their outstanding loans and lending commitments, as well as certain additional interest and fees.
Reacting to today's debt-extension news, Moody's Investors Service placed MGM Mirage's ratings on review for possible modest upgrades.
Moody's MGM Mirage debt assignments now include speculative-grade Caa2 Corporate Family and Caa3 Probability of Default ratings and a SGL-4 Speculative Grade Liquidity rating.
The SGL-4 rating means MGM Mirage has "weak liquidity," according to Moody's definitions.
"The successful closing of the amendment as proposed would be a positive step forward for MGM with respect to near-term financial flexibility as well as its longer-term ability to remain viable as a going concern," Peggy Holloway, a Moody's vice president, said in a statement.
Moody's said the degree of any upgrade would likely be modest given the company's high leverage, challenging operating environment, potential CityCenter financial commitments and its ability to close condominium sales at CityCenter on the Las Vegas Strip.
Key factors affecting the company's near-term and longer-term financial profile include "the challenging operating environment in Las Vegas," the potential sale of the company's interest in the Borgata and a possible Macau initial public stock offering, Moody's said.
Discussion: comments so far…
Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.
Only trusted comments are displayed on this page. Untrusted comments have expired from this story.
No trusted comments have been posted.
Post a comment
Most Popular
- Viewed
- Discussed
- E-mailed
- Chinese company agrees to finance proposed Henderson arena
- South Point owner Michael Gaughan’s take on ‘Vegas Stripped’: ‘I’ll give it an 8’
- Romney says he prevented Massachusetts from becoming ‘the Las Vegas of gay marriage’
- Coolican: Henderson officials out of loop on police brutality case, raising red flags
- See mug shots of 16 arrested in stolen-property police sting
- UNLV eager to get on the court for big game against San Diego State
- Criss Angel denies allegations of fight with fired employee
- Lumberjacks — ‘Where the Big Boys Eat’ — hiring for North Las Vegas location
- Berkley draws stark contrasts with Heller over immigration
- Conceptual design unveiled for Henderson Space and Science Center
Blogs
The Kats Report
Live color from the scene at Thomas & Mack Center as UNLV takes on San Diego State
South Point owner Michael Gaughan's take on 'Vegas Stripped': 'I'll give it an 8' (3 Comments)
Author relishes writing the life story of ‘larger-than-life’ Oscar Goodman (3 Comments)
Elsewhere
Landowner: All roads could lead to Uxbridge casino
Revel reveals smoke-free casino opening
Cirque du Soleil show in Sands China casino to close this month
Meet the woman behind Sheldon Adelson
The Sun
Locally owned and independent for more than 50 years.
Awwfageta'boutit!
Ho and her money sounds smelly to me.
Q: WHo is Harry Reid's largest contributor?
A: MGM Mirage. http://www.opensecrets.org/politicians/s...
Doesn't seem to hard to connect the dots here with "Mr. Cleanface". http://www.freerepublic.com/focus/news/1...
I wouldn't want to be in New Jersey either. What a dump of a state, pretty much just a bunch of welfare mommas and tax and spend liberal politicians.
Someone should investigate the New Jersey Division of Gaming Enforcement and find out how many of their executives have ties to organized crime. I bet it would be high. They probably want MGM out of there so they won't develop the vacant land next to the Borgata. They're just protecting the others casinos which are probably run by the local NJ mafia.
Well of course it is all a giant conspiracy of Harry Reid and Obama getting Chinese money to build Chinese style internment camps in America, tune in Glen Beck for more information. The SEIU is in on it too. Remember the "Freepers" talking about a "black-love child" in conjunction with a former president?? Even Drudge dropped linking to them.
It is a simple case of one state having different standards for obtaining a casino license than another. Just like some states require a helmet to ride a motorcycle and others don't. I thought the teabag paranoids wanted "states rights?"
Congratulations to the NJ regulatory agencies who actually have some integrity when considering the connections to organized crime. Nevada and MS looked the other way. Pansy's FATHER not only provided her the money to invest in the Macau casino, but the LICENSE under which the casino operates is his too. Somehow Nevada missed that connection.....
MGM MIRAGE abandoning its New Jersey, USA market in order to retain its Macau foreign casino holdings, makes a statement which makes me very uncomfortable, but I at this moment cannot adequately verbalize my concerns. My gut tells me that MGM MIRAGE is somehow risking its future, because I doubt that the political stabilty in Macau over time will equal that in the USA. Also, why was this issue not fully dealt with before MGM MIRAGE began its Macau investment?
Macau is an obvious choice. Who the heck would want to be in New Jersey anyway. Yuck!
RIP Atlantic City, this time there is no one to blame but yourselves!!!
Governor Rendell of PA. dropped you in your coffin and your antiquated regulations nailed it shut.
Table Games in PA. is what put you on life support.
Forcing MGM and (oops that's a secret) Harrah's (coming soon or should i say leaving soon) 4 casino ownership out is the flat line for you.
Follow along.
MGM picked Macau over AC for every obvious reason known to man.
Harrah's is trying to acquire a big stake of a Macau gaming company (Melco Crown)
WHEN Harrah's succeeds in acquiring 32.5% of Melco (whose President is the son of Stanly Ho) Harrah's is partnered with someone AC deems UNSUITABLE as a partner.
Harrah's is given the ultimatum of their 4 casino's in AC or 2 in Macau.
Hmmmm let me think on that for less than a millisecond, Macau it is.
And poof Harrah's is gone from AC along with MGM.
If AC is not careful Carl Icahn will rethink his debt buy up of Trumps 3 properties and concentrate on Fountainbleu or whatever he may rename it.
Whats left you ask? Lots of casino's with small (if any)regional operators and the end of The Jersey Shore as we know it... RIP AC
Sorry Snookie!
Wynn was right decades ago when he left Atlantic City. Those officials are screwed with thier regulations. They are willing to lose someone who built, and is willing to build, the most succesfull casino there, the borgata? Can you imagine if Nevada told Mgm no, and they had to choose between Nevada and Macau? Atlantic City telling MGm no is going to hurt them, MGM won't be building on that 70 acre lot and won't be reinvesting anything into that state. I read somewhere else they are asking between 650-750mil for its share of the borgata but no takers.
Yes, the DGE was right to bring up concern about MGM's Macau partner. Dave 202 said it best. But, if MGM backs that Pansy is innocent of the DGE's claims, than why would MGM not fight the charges with the NJ CCC? I guess their strategy to deal with this is a pretty clear reason. MGM leaving AC is a big blow to the town. I only hope the DGE is correct in their findings and recommendations.
Sounds like a episode of Jersey Shore meets the movie Casino!!!
Good for MGM Mirage! I have a measure of new found respect for them. This will not hurt Nevada to be sure.
Another reason not to go to AC.
MGM's pulling out, Pinnacle is pulling out, too. A/C is dying. Why would you go there on a rainy October day? Other than the 3 Summer months, it's utterly depressing. Trump's casinos are always in bankruptcy, he doesn't own them anymore.
The casinos are surrounded by ghettos-nobody ventures beyond Pacific Avenue since their lives will be in danger. The little old ladies from Pa. don't take the bus to A/C anymore. If you think it's bad in Vegas, go to A/C. Very sad...
Atlantic City had years and years and years to clean up their act. Make the city comfortable and safe for their visitors. But they didn't do it, and now they will suffer the consequences.
Actually NJ isn't a bad state to live in. I lived there in the '80s. One good thing about NJ is that there are no self serve gas stations. It is illegal to pump your own gas and there is no cost difference between neighboring states.
NJ also has a state run lottery, something we need here in NV.
Atlantic city is the most nasty town in America my father lives in NJ and i go to ac every weekend ! can anyone say dump . NJ made a big mistake ! you think Vegas is bad go to Ac
Is mr ed from jersey? I'm beginning to think belleville is from Jersey also!
I hope that BYD will not purchase the other half of the Borgota, as this would be the road to perdition for Boyd Gaming.
MGM needs the money and selling its share of the Borgata gives them a face saving way to get it. Yes AC is a dump and the regulations are incredibly onerous, however the Boragata is a major success. Its the only place down there worth going to.