For Sale : Brand New Shopping Malls, Call Sheldon
There are lots of reports out in the news today concerning Las Vegas Sands Corporation's inability to raise capital to fund the continuation of it's Cotai Reclaimed Field of Dreams strategy.
Bloomberg is reporting that LVS is in talks with Citygroup about revising terms of it's $5B loan... upping the interest payments a staggering 3.5%. Ominously, the loans are planned to repay previous debt as well as fund Cotai's future/present.
LVS spokesman Ron Reese says:
Sands is reconsidering efforts to obtain $5.25 billion in financing for the Cotai Strip and is likely to instead seek smaller-scale financing for individual projects.
I'm curious what the difference between "Cotai Strip" and "smaller scale individual projects" is. Would S.S.I.P.'s include Sands BethWorks, Marina Bay Sands, the Sands Expo 2.0 and the other stuff they've got planned for the Las Vegas site?
Mr. Reese continues:
The company at this point would prefer to keep in place current Macau debt terms, rather than renegotiate an entirely new package. The company has the option of stepping up planned sales of assets, including shopping malls.''
Uh... what? Isn't this like cutting off one of the fingers on your highly trained pick pocketing hand?
It's a bit shocking that the bean counters at LVS don't have the pride swallowing ability to intelligently dial back, or even pause, their aggressive expansion plans during the global financial storm.
Looks to me like LVS might be more than overplaying their hand, they're playing poker on a chess board.