he CEO of Las Vegas Sands Corp. said that his company doesn’t intend to hire a restructuring firm to help it deal with its outstanding debt: us$ 10.47 billion at the end of last year. "The difference between us and you guys is that we believe what we say," Adelson told an investors’ forum in New York. "Apparently the market doesn’t believe us."
The company is stable and the "shuffle in management" has only improved its prospects, he said. "Don’t think that we have one foot in the pail of bankruptcy and the other on a banana peel in the middle of a hurricane," Adelson said. "That’s not the case."
Sands, which has said it owes principal payments of us$ 114.6 million this year and us$ 197.6 million in 2010, revealed Tuesday in a regulatory filing that it told William Weidner, its president and chief operating officer, that he would be replaced four days before he resigned.
Weidner, who had held those positions since December 1995, said in a resignation letter dated Sunday that was included in Sands’ filing that he disagreed with Adelson on how to run the company. His termination has led to speculation that other managers might be ousted, and Adelson said Tuesday that "nobody’s indispensable." "The only indispensability in our lives are our wives," Adelson said.
Lawrence Klatzkin, an analyst with Jefferies & Co., said in a note to investors Monday that Bradley Stone, Sands’ president of global operations and construction, might follow Weidner out the door because they have worked closely for at least 20 years. "At this point it is not known whether or not Stone will remain at the company," Klatzkin wrote. Klatzkin wrote, however, that he hopes Stone stays because "he is a positive influence for the company, in our view."
Adelson said Tuesday that his company planned to increase companywide cost cuts to us$ 470 million or more annually - us$ 220 million more than it announced in February that it would trim from operations in Las Vegas and Macau. "At that level, or perhaps more, there’s no need for us to go out and sell assets," he said.
But Adelson also said he planned to meet next week with four groups interested in buying into the company, including two construction companies interested in financing and building two suspended hotel projects in Macau in exchange for equity. The company has said it wants to sell two malls in the Chinese gambling enclave, and Adelson said Tuesday that 19 potential buyers have come forward.
Klatzkin said selling the malls would go a long way to help the company’s balance sheet and bolster its stock price. The stock rose 16.9 % Tuesday to close at us$ 1.66, down more than 76 % since the start of 2009. "Without the sales," the analyst said, "we remain concerned about a potential covenant breach and believe the stock could remain under pressure."But Adelson said the company has "other viable, credible, validated options."
As president and COO of Las Vegas Sands, Weidner oversaw the company’s U.S. and international locations. According to the filing, he and the casino operator tried for days to negotiate terms for his departure but failed. The company feels Weidner’s March 4 meeting with its board served as notice that his services were no longer required, according to the filing. "We just sort of helped him out a little bit. ... We helped him resign a little bit," Adelson said Tuesday.
An SEC filing in November revealed substantial internal conflict at Sands. The company’s board had created a committee to resolve disputes between Adelson and other senior managers and evaluate the company’s decision-making and address "a loss of confidence" by managers.
Weidner said a week later at a forum for investors that he thought the infighting was similar to what happens at other companies. "I think you can think of it as a junkyard dog fight," he said at the time.
That same month, Las Vegas Sands got investors to provide a much-needed capital infusion of about us$ 2.1 billion, but Weidner said the company made a mistake in not raising it quickly to keep in compliance with its debt obligations. "It was pretty much a monumental screw-up," Weidner said at the time.
The day after Weidner’s resignation letter was sent, Las Vegas Sands named Michael A. Leven as his replacement effective April 1. Leven, a Sands board member since 2004, is the founder and former president and chief executive of US Franchise Systems Inc., which developed and franchised the Microtel Inns & Suites and Hawthorn Suites hotel brands. He has also held posts at Holiday Inn Worldwide, Days Inn of America and Americana Hotels. He had been CEO of the Georgia Aquarium in Atlanta since September 2008.
Las Vegas Sands plans to open a us$ 743 million casino in Bethlehem, on May 22 and a us$ 5.4 billion resort in Singapore in December. It reported losing us$ 136.5 million in the fourth quarter last year.