Las Vegas Sands seeks funding to revive Macau work

Sands is willing to contribute additional equity to its hotel and casino complex on Macau’s Cotai Strip, on top of the us$ 1.6 billion it’s already spent, Leven said, declining to give an amount. He estimated the total cost at about us$ 3.6 billion and said it could be finished by June 2011.

Adelson, the company’s CEO, stopped construction on the two-thirds-built structures last year as credit markets froze, revenue growth slowed and the risk of loan defaults swelled. The hotels, located across the street from Sands’ Venetian Macao casino resort and next door to Melco Crown Entertainment Ltd.’s City of Dreams, will be branded St. Regis, Shangri-La, Traders and Sheraton.

“We expect Macau gaming revenues will increase by 20 % in 2010,” Deutsche Bank AG analyst Karen Tang, who covers Hong Kong-listed Macau casino operators, said in a note to clients today. “The dominating growth driver is the ability by junket operators to lend. Junket operators told us that higher real estate prices are speeding up the velocity of money, and will likely strengthen their ability to lend.”

Junket operators bring high rollers to casinos, enticing them with perks and providing credit. Las Vegas Sands climbed 47 cents, or 2.9 %, to us$ 16.82 at the close of New York Stock Exchange composite trading yesterday. The shares have almost tripled this year.

The Las Vegas-based company aims to get commitments for project financing from lenders by the end of the month to resume work on lots 5 and 6 of its 21,000-room hotel and casino complex on Macau’s Cotai Strip, Leven said in an interview in New York yesterday.

“We believe it’s the game changer and that’s why we want to finish it,” Leven said. “It’s key to our growth in Macau, and it’s key for Macau’s differentiation, to make Cotai a destination” for meetings and conventions. Goldman Sachs Group Inc. is coordinating the financing, Leven said.

Macau’s casino revenue rose 22 % to us$ 4 billion in the third quarter, the first gain in a year. Earnings had dropped on annual basis from the fourth quarter of 2008 after China tightened travel for its citizens to Macau, the only place in the country where casinos are legal.

Separate from the construction financing, Las Vegas Sands plans to sell a stake in its Macau business in an initial public offering on the Hong Kong Stock Exchange. Wynn Macau Ltd., controlled by billionaire Steve Wynn, raised about $1.87 billion selling a stake in its Macau unit this month in Hong Kong.

“They have invested billions of dollars in hotels which have yet to open,” said Sean Monaghan, a Singapore-based investment consultant who worked for Merrill Lynch & Co. as a gaming analyst. “So spending more money opening them will help drive profits.”

Sands may have a “tougher time” getting a high valuation than Wynn Macau did because Adelson’s company “has more than one casino in Macau and a whole lot of semi-completed projects and their issues will be far more difficult and complex,” Monaghan said. Leven reiterated Sands intends to open the first stage of its Singapore casino resort in the first quarter of next year. The company said in July it wanted to open the casino by February 15.

Marina Bay Sands’ Singapore opening date will be decided at the end of November, Leven said, after builders lift the last piece of the foundation of a “Sky Park” that will top the three 55-story hotel towers of the complex. Sands has begun hiring 9,000 employees on its Singapore payroll and expects to have nearly “everyone on board by the end of January,” Leven said.

Singapore is counting on the Sands resort and a second casino project on Sentosa island to help the city state achieve its goal of luring 17 million visitors and tripling annual tourism revenue to us$ 21.6 billion by 2015.

Genting Bhd.’s Genting Singapore Plc, which is developing the Sentosa resort, plans to open its first phase early next year. The opening will include Southeast Asia’s “first and only Universal Studios theme park, four hotels, the casino and part of FestiveWalk,” Robin Goh, a spokesman at Resorts World, said via e-mail.

Each casino complex will create more than 10,000 jobs, Singapore Tourism Board CEO Aw Kah Peng said yesterday at an event in New York, where chef Daniel Boulud announced he will open one of Marina Bay Sands’ six celebrity chef restaurants.

Boulud said he was leaving Wynn Resorts Ltd.’s namesake casino in Las Vegas where he has a brasserie, and is looking for a new restaurant opportunity in the biggest U.S. casino city.