LAS VEGAS " Shares of MGM Mirage surged Monday amid reports that the struggling casino company was considering casino sales, new investors and new borrowing to shore up its balance sheet.
But Crown Ltd., a publicly traded investment firm, formally told Australia's stock exchange Monday it was not negotiating to take part in the $8.7 billion CityCenter project on the Las Vegas Strip that MGM is building jointly with the state-owned investment firm Dubai World.
"It is Crown Limited's policy not to comment on speculation," the company said in the Australian filing. "Crown is making an exception to its policy. Crown is not having any discussions with MGM or Dubai World with respect to any such investment in CityCenter."
MGM Mirage, whose majority owner is billionaire Kirk Kerkorian, has had trouble producing its half of the funding for the project, which is to open in phases starting later this year. Even including Monday's jump, 88 cents to close at $5.53, MGM Mirage shares have fallen 90.4 percent from their closing price of $57.88 last April 7.
The casino company bought itself some breathing room last week when it poured $200 million into the Las Vegas development, covering a payment owed by partner Dubai World as well as its own.
The partners still must put down about $800 million more before they can access a $1.8 billion credit agreement that completes the project's funding.
Dubai World has sued MGM Mirage, accusing it of mismanaging CityCenter.
The Wall Street Journal reported last week that Crown and another investment fund, Colony Capital, based in Los Angeles, were in talks with MGM Mirage regarding possible investments. The paper reported over the weekend that MGM Mirage has tapped Morgan Stanley to help with the possible sales of MGM Grand Detroit and Beau Rivage in Biloxi, Miss., and could get between $1 billion and
$2 billion for the properties.
Both casinos have been steady performers for MGM Mirage, but the company could use the money to pare down its debt of more than $13 billion.
MGM Mirage spokesman Gordon Absher said Monday that the company could not comment about the reports.
But MGM Mirage Chief Executive Jim Murren has told the Associated Press in January that all options are on the table, including selling casinos, restructuring debt and selling undeveloped land and company airplanes.
In another interview March 17, Murren said the company considers all the offers it gets " on individual casinos or groups of them. And he said there has been a high level of interest.
"We are not actively out there marketing our properties to buyer groups," Murren said. "What we do as fiduciaries is we turn over that inquiry to our advisers, and we have some smart people looking into all this."
When considering possible sales, Murren said, MGM Mirage has to consider whether selling a casino will be more worthwhile than keeping it to make money or use as collateral in the future.
"It's not a simple decision of do we sell property X or Y, even as difficult as those decisions typically are," Murren said. "The added complication is, can that asset be better utilized as part of that company's portfolio as it seeks to raise new debt or restructure existing debt?"
MGM Mirage completed the sale of its Treasure Island casino to Kansas billionaire Phil Ruffin for $775 million last month. And it has taken measures to shore up its finances, including suspending its 401(k) matching contributions last month and rolling back a 2.5 percent salary increase last week.
And it recently won a waiver from the terms on some of its debt that gives it until May 15 to fix its finances.
MGM's stock jumped 88 cents, or 18.9 percent, to close at $5.53 on Monday. It rose 18 cents more in after-hours trading.
Comments
Use the comment form below to begin a discussion about this content.
Sign in to comment