Turnabout for MGM Mirage and Dubai in CityCenter Casino Deal
Just last spring, MGM Mirage was publicly castigated and forced to make major concessions by its Dubai World partner in the development of the CityCenter casino complex on the Las Vegas Strip. Now, with MGM on more stable financial ground, the massive casino, gambling, and resort project has been shaken by news that Dubai cannot honor its debt service.
Dubai World, the investment arm for the Dubai emirate city-state, said Wednesday it needed a six-month moratorium on interest and payments against its $60 billion in debt, causing ripples throughout the international financial community. Casino stocks were particularly hard hit, as Dubai's close ties to MGM worried investors.
MGM officials denied Dubai's troubles would have an impact on the gambling empire, and asserted that CityCenter is on pace to open this year.
"CityCenter is fully funded, on schedule and ready to begin welcoming guests starting next week," said an MGM spokesman.
Abu Dhabi, which controls nine-tenths of the oil revenue in the United Arab Emirates, has said that it and the central UAE bank will not allow default by Dubai, guaranteeing the debt will be repaid.
MGM Mirage stock fell over four percent Friday on the news, as the market in general retreated about two percent.
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