Monday, April 27, 2009

Las Vegas Corp. : Time To Say Goodbye To Macau Casino

. Monday, April 27, 2009

By stockOzone team

If media reports are to be believed, Las Vegas Corp. is considering selling one of its prized casino in Chinese island of Macau. According to the South China Morning Post, a Hong Kong newspaper, the gaming operator plans to put the Sands Macao up for sale for about $1.3 billion after failing to sell its luxury shopping centers in Macau.

The report added that under the proposed deal, Las Vegas Sands would sell the building but continue to run the casino under its gambling license and pay its new landlord rent based on the casino's performance. The newspaper said that discussions with potential buyers began last week.The 229,000 square meter Sands Macau casino was completed in 2004 and was the first first foreign-owned casino to open in Macau peninsula.

Las Vegas Sands Spokesman Ron Reese said they will neither confirm or deny the report.

The company has been hit hard during the current economic downturn. Unlike in the past, when a bad economy brought more visitors to the casinos, the current recession is different in the sense that the number of customers has actually come down.The company lost $188.8 million in fiscal 2008, which ended Dec. 31, compared with a profit of $116.7 million in 2007. It had $10.47 billion in long-term debt as of Dec. 31, according to its 2008 annual report.

The company's problems have been accentuated further by tightened visa restrictions imposed by Chinese government in Macau over the past several months. In late 2008, mainland Chinese residents were limited to visiting Macau once every three months, up from the summer when a rule restricting visits to once every two months was imposed. According to Gaming Inspection and Coordination Bureau revenue from gaming and gambling actvities plunged 12.7% in the first quarter of 2009 from the sme period, a year earlier.

Disclosure: Author does not own any of the stocks discussed here.

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