Las Vegas, NV – Las Vegas Sands Corp. stumbled into the weekend with its stock price below $10 but vowed it would forge ahead with its U.S. operations and a major resort project in Singapore.
The price of Las Vegas Sands common shares closed at $7.03 on Friday, November 7 a bit better than the $4.32 it dropped to on October 28. But it was nowhere near the 52-week high of $122.96 where it had been perched on December 10, 2007.
The share price began dropping when Las Vegas Sands filed an 8-K statement with the U.S. Securities and Exchange Commission on November 6 warning that the company’s finances had been wobbled to the point that it might default on various loans.
The lengthy 8-K said cited gloomy “current Las Vegas operating estimates” for the remainder of 2008 and much of next year as well as tougher refinancing markets as reasons for concern. The statement said: “If the capital raising program is unsuccessful and the Company does not have access to the available borrowings under the U.S. senior secured credit facility, the Company would need to immediately suspend portions, if not all, of its ongoing global development projects and consider other alternatives. These factors raise a substantial doubt about the Company’s ability to continue as a going concern.”
There was some debate in the financial media as to whether the statement was a warning of imminent collapse or more precautionary advisory added during the legal vetting process.
Company Chairman and CEO Sheldon Adelson moved in October to beef up the finances of Las Vegas Sands with a family investment of $475 million in convertible senior notes. The transaction was described by the company as part of a capital-raising program Las Vegas Sands was undertaking in partnership with an investment banking firm.
The statement noted, “As the Las Vegas properties did not achieve the levels of Adjusted EBITDA necessary to maintain compliance with the maximum leverage ratio for the quarterly period ending September 30, 2008, the Company completed a private placement of $475 million in convertible senior notes with the Company’s principal stockholder and his family and used a portion of the proceeds to exercise the EBITDA true-up provision.”
Las Vegas Sands had no other direct comment on the company’s financial health other than to say in a statement November 7 that the development of the $4 billion Marina Bay Sands project in Singapore would continue. Adelson led a delegation to Asia to reassure the Singapore government that Las Vegas Sands remained committed to the resort and casino. “In light of the recent turmoil in the global markets, I felt the need to personally reaffirm our commitment to the success of Marina Bay Sands,” he said. “I am pleased to say the Singapore Government’s support of our project remains strong.”
Marina Bay Sands will include a 120,000 square-metre (1.29 million square feet) convention center offering 33,000 square metres (355,209 square feet) of flexible exhibition space as well as ballroom and meeting space. The project, which also includes 2,500 hotel rooms, is scheduled to open late next year.
Adelson’s net worth put him as the third richest person in the U.S., according to Forbes magazine in September, but today figures push him down considerably in the rankings.
Reach Ashlyn LaPorte, executive director of event management, Sands Expo, at (702) 733-5611 or firstname.lastname@example.org; Paul Stocker, director of sales, Marina Bay Sands, at +65 6305 6900 or email@example.com