Sands has `all the money’ needed for Singapore casino

November 18, 2008
Singapore Democrats

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Bloomberg

Las Vegas Sands Corp. has enough money to finish Singapore’s first casino without help from the city-state’s government or billionaire Kwek Leng Beng after the company raised $2.1 billion, President William Weidner said.

Parts of Marina Bay Sands will open later than the end of 2009, as originally scheduled, on construction snags and an “unprecedented” shortage of raw materials that is now “opening up,” Weidner said in an interview in Las Vegas. “We have all the money required to be able to complete the project.”

Las Vegas Sands, controlled by billionaire Sheldon Adelson, halted developments in Macau and Las Vegas to focus on finishing the $5 billion Singapore project and the casino part of its Bethlehem, Pennsylvania, site. The company raised $2.1 billion last week selling stock and warrants, prompting auditor PricewaterhouseCoopers LLC to yesterday remove a warning that there was “substantial doubt” the company could survive.

“They should be okay for the next 12 months,” said Billy Ng, a Hong-Kong based casino analyst at JPMorgan & Chase Co. “They have proven their liquidity. This will help investors’ confidence.”

Adelson and Weidner plan to travel to Asia within the next two weeks to assess the company’s developments, said Weidner, who is also Las Vegas Sands’ chief operating officer.

‘Rough 18 months’

Raising cash and mothballing developments “gets us through what we anticipate to be a very rough 18 months approximately ahead of us until we see recovery, somewhere in 2010 or 2011,” Weidner told an investor meeting in Las Vegas late yesterday.

Las Vegas-based Sands talks with the Singapore Tourism Board “day to day” and the Ministry of Trade and Industry “when there’s an issue that rises to another level,” Weidner said in the interview.

Singapore is “carefully considering” proposals by Las Vegas Sands and Genting International Plc to open their casino resorts in the city state in “progressive” stages, S. Iswaran, senior minister of state for the Trade Ministry, said in Parliament yesterday.

Each of the multibillion-dollar projects must still open as an “ntegrated resort” rather than a “standalone casino,” Iswaran said.

Las Vegas Sands expects to open at least 1,000 hotel rooms in two towers on schedule by the end of 2009, Executive Vice President Bradley Stone said Nov. 10. The company will also open “a portion” of the mall, the casino, and most of Marina Bay Sands’ meeting and conference space, he said.

Hotel, Mall

By mid-2010, Las Vegas Sands plans to open the remaining hotel rooms and most of the mall, with final stages such as a sky park and some suites possibly taking longer, Stone said.

Las Vegas Sands didn’t discuss capital-raising options directly with Temasek Holdings Inc. or the Government of Singapore Investment Corp., Weidner said in the interview.

The casino operator has lease commitments for about 46 percent of the Singapore mall space and plans to eventually sell, or otherwise “monetize” its malls in Macau and Singapore, Weidner said.

The company “initially” approached Kwek, the billionaire whose City Developments Ltd. advised Las Vegas Sands on its winning bid for Singapore’s first casino resort, Weidner said.

“We talked to him later about where we stood and what we were doing with the capital raise so far,” he said. “He’s a friend and every time we go to Singapore we sit down and talk with him.”

Bank Discussions

Las Vegas Sands has met with “the major Singapore banks and a lot of international banks” involved in its Singapore project financing, including DBS Group Holdings Ltd., Weidner said.

“We felt compelled to sit down and talk to them and let them know where we are in the cycle,” he said. The company is in talks with international banks about potentially financing the completion of its half-finished Macau projects when credit markets thaw and the global economic environment improves, Weidner added.

Adelson was ranked the third-richest man in the U.S. by Forbes magazine before Las Vegas Sands shares tumbled 94 percent this year. Adelson and his family have invested about $1 billion in the company since Sept. 30.

The company needed the cash to avoid violating the terms of some U.S. loans and triggering defaults that risked forcing it into bankruptcy, the auditors said Nov. 6.

The shares have plunged this year because investors are concerned weakening casino revenue growth in Las Vegas and Macau amid the global financial meltdown will deprive it of the cash needed to pay for expansion projects and loans.

“Any time you have those kinds of transparent conversations, noise happens in the system,” Weidner said. “But the noise ought to all go away.”

Genting International is a unit of Genting Bhd., Asia’s biggest publicly traded casino operator. The company is building a casino resort on Singapore’s Sentosa island.

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