Las Vegas Sands Bailed Out by Owner
Attempting to keep his lines of credit operating, Las Vegas Sands CEO and primary shareholder Sheldon Adelson loaned his own company almost half a billion dollars in cash. The money will help Las Vegas Sands avoid breaking the terms of a previous credit facility, which required the company to maintain a debt ratio of no more than 7.5 times its cash flow.
While the amount is staggering to an individual, it is a relatively small sum in the casino and gaming industry, but will help Sands improve its liquidity at a time when such has been suspect.
By sticking within the set terms of the previous agreement, Sands also retains its chances for credit approval in the future. A failure to stay within the ratio boundaries may have caused the company's credit assessment to drop significantly.
Las Vegas Sands is currently trying to renegotiate an existing loan of $3.3 billion, and seeking a new loan of $2 billion to finance ongoing construction in Macau. The Macau project is estimated to cost over $10 billion, and is scheduled to be completed by 2012.
Casino operators in general have been forced to curtail, suspend, or cancel new projects as credit difficulties have left no cash to pursue new venues and projects.
