International edition
June 25, 2021

Completing the largest IPO in gaming industry history

Sands China tumbles 10 % in Hong Kong debut after us$ 2.5 billion IPO

(Hong Kong).- Las Vegas Sands Corp.'s Macau operation tumbled 10 % in its first day of Hong Kong trade Monday, after raising us$ 2.5 billion in an initial public offering to help restart its languishing gambling projects.

S

ands China Ltd., controlled by billionaire Sheldon Adelson, tumbled on its first day of trading in Hong Kong after Dubai World’s possible default hurt investor confidence. Las Vegas Sands Corp. said that as a result of its recent fundraising activities it has raised us$ 5 billion of combined debt and equity financing.

Its Macau unit slid 10.2 % in Hong Kong. One of its subsidiaries, Sands China Ltd., was listed on the Stock Exchange of Hong Kong after completing an initial public offering that raised a total of us$ 3.1 billion. The IPO was comprised of the us$ 2.5 billion listing and us$ 600 million that was raised in a pre-IPO exchangeable bond financing transaction completed in September.

Last Friday, the company announced it has received commitments for us$ 1.75 billion of project financing which, together with us$ 500 million of IPO proceeds, will be used to restart and complete construction on the combined Shangri-La, Traders, and Sheraton resort complex located across from the company's Venetian Macao property on the Cotai Strip.

"With this public offering, in combination with our project financing efforts, we have already embarked on the initial stages of restarting the construction of our developments on the Cotai Strip and continuing the progress we have made in helping diversify Macau's economy and further establishing it as an international leisure and business destination," said Sheldon G. Adelson, chairman and CEO of Las Vegas Sands. "On behalf of the Sands China Board of Directors, I would like to thank the Macau government for their support, as well as acknowledge with much appreciation our team of professionals, whose hard-work and dedication was limitless throughout this entire process."

The Hong Kong listing represents a sale of approximately 30 % of Sands China Ltd's. Macau operations. It is the second largest Hong Kong-listed IPO year-to-date and the largest Hong Kong-listed spin-off since 2002.

Adelson said the completion of the offering, which could still bring an additional us$ 250 million in proceeds should the 10 % over-allotment of shares be exercised by the underwriters, will deliver positive benefits on many fronts, including its impact on Las Vegas Sands which will use a portion of the proceeds to further solidify its balance sheet and remove debt covenant concerns related to the company. With its portion of the IPO proceeds, in combination with its existing balance, LVS has approximately us$ 5 billion of unrestricted cash currently on its balance sheet.

Adelson said he was also particularly pleased that the successful IPO means construction on the Cotai Strip - his vision to replicate the Las Vegas Strip by building a critical mass of hotel rooms, restaurants, retail, entertainment, and convention and exhibition facilities in Macau - can resume.

"Our ability to add more properties to the Cotai Strip will enhance visitation from all parts of the Asia-Pacific region and significantly increase the overall length-of-stay in Macau. The increased number of hotel rooms, from prominent hotel brands Shangri-La, Traders, Sheraton and St. Regis, will provide a greater variety of product and price options for consumers and give us additional capacity to further grow our meeting and convention business, among others. This is an important next step in Macau's ability to assert itself as an international tourist destination," said Adelson.

The construction of the 1.2 million sqm complex is approximately 65 % completed and when work resumes, the development will be finished in phases. Phase one, which is expected to open in June 2011, will feature 3,700 hotel rooms and suites from the Shangri-La, Traders and Sheraton hotel brands, as well as a theater and additional retail, gaming and meeting/convention facilities. Phase two includes a 2,300-room Sheraton hotel tower, as well as other non-gaming amenities, and is expected to open in December 2011. Timing for completion of the St. Regis hotel and serviced-apartments will be announced at a later date.

While Sands China’s fundraising makes its plan to recreate the Las Vegas Strip in the Chinese city viable, news of a possible default by Dubai World contributed to “some negative sentiment” toward tourism-related companies, independent strategist Jonathan Galaviz said.

“Half of Dubai’s story is tourism,” Galaviz said in a phone interview today. “There will probably be some negative sentiment toward tourism assets globally, such as casino operations, as Dubai gets squared away.”

Other casino operators rose today as investors took advantage of Friday’s declines, Steven Leung, director of institutional sales at UOB Kay-Hian Ltd., said in a phone interview today.

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