Casino giant Las Vegas Sands Corp will detail its plans to handle its debt crisis early next week, said 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 on Thursday that it may violate promises it made to lenders and default on US$3.8 billion in debt on Dec. 31 if its operating earnings this calendar year don’t equal at least 13 percent of net debt, which subtracts cash on hand. 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 had four options: It could boost earnings in Las Vegas, which likely would require big cost cuts and might result in layoffs; 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 US$50 million in capital to the Vegas operations, or a combination of all four.
As of December last year, the company had US$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 US$2.18 billion in cash by selling 180.8 million shares at US$49.14 each. The Adelsons personally loaned the company US$475 million this fall to avoid a funding crunch, and it was unclear how much cash the couple had left.
In interview last month, Adelson said Las Vegas Sands was looking to raise US$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 intended 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 on Friday it hired a new chief financial officer, CB Richard Ellis Group Inc CFO Kenneth Kay, to start on 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 US$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 on 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 said that Las Vegas Sands Corp hadn’t given signs of financing problems at its project in Singapore.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by