Sheldon Adelson
Online Casino Sphere
Many businesses around the world are feeling the effects of the economy and the frozen credit market. But few are more affected than Las Vegas Sands, and there is no bailout looming for LVS, at least not from the American government.
Sands shares have seen their value fall from a one-year high of $122.96 per share to single digit prices of late. Sheldon Adelson, majority owner of the casino giant, was forced last month to loan his company a half-billion dollars, so as to avoid breaking a credit covenant.
The company’s liquidity problems have still left it teetering on the edge of defaulting on certain credit conditions. If that were to happen, creditors would be able to demand repayment sooner than originally arranged. Such a circumstance would almost force Sands to seek bankruptcy protection.
Last week, LVS shares enjoyed a minor resurgence, rising with the overall market. Part of the boost came from the announcement by the government of Singapore insisting that the Las Vegas Sands casino under construction would be finished, even if government assistance were needed.
However, this week the company has had to suspend casino projects in Macau and condominium construction in Las Vegas. The company says it will try to sell over 180 million shares of common stock, as well as 5.25 million preferred shares in an effort to raise more than $2 billion to stave off creditors.
Macau officials have refused to follow Singapore’s example, instead saying there will be no government aid to Las Vegas Sands.
The bad news drove the stock toward record lows, as a third of value was lost Tuesday. Just before the closing bell, the price per share had declined $2.79, down to $5.21.