Two Way Hard Three | Las Vegas Casino & Design Blog

November 6, 2008

UPDATED: RJ: Las Vegas Sands Discloses Potential For Default

Posted by Hunter

As required by law, Las Vegas Sands filed a disclosure statement with the SEC today that indicates the company may not be able to maintain required leverage ratios which could put it in danger of a default.

A default could potentially lead to other action such as bankruptcy, though the company did not use that term in its filing.

Will Sheldon Adelson lend the company more money? Is he in a position to do so?

Will we see cuts at their resorts, in either staff or service?

http://www.lvrj.com/news/breaking_news/34023824.html

UPDATE: The Las Vegas Sun has more:

http://www.lasvegassun.com/news/2008/nov/06/las-vegas-sands-may-miss-covenant-requirements/


Categories: Business of Gaming, Las Vegas Strip, Palazzo, Venetian/LV Sands
Tags: lasvegas, lasvegassands, palazzo, venetian, venetianmacau


Comments

Read archived comments (8 so far)
November 6, 2008 9:32 AM Posted by Pikes

WOW, How the mighty have fallen.

November 6, 2008 12:12 PM Posted by GregoryZephyr

Now, Senator Reid will start lobbying Paulsen to provide bailouts for the casino industry. Bailouts for everyone! Uncle Sam says, "Come and get your money today while supplies last!"

November 6, 2008 3:26 PM Posted by David McKee

Liz Benston's story in the Sun has considerably more detail on what's going down over at LVS HQ.

November 6, 2008 4:10 PM Posted by Phil

Bloomberg update on this situation.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aws07wpBjjZI&refer=worldwide

November 6, 2008 9:58 PM Posted by Mike T

I was all ready to post what comment #1 says, but as you can see he beat me to it. I've never been the biggest fan of Adelson's properties, but I do not wish ill will upon any company here in town. I sincerely hope they're able to get this worked out.

November 7, 2008 8:00 AM Posted by socalduck

I wouldn't expect Harry Reid to exert too much effort helping LVS, given Adelson's support of conservative candidates and past efforts against unionization.

Much of Adelson's wealth was tied to LVS, so given what has happened to the stock the past few months, I doubt he has the personal firepower to prop up the company. He already bought over $400m in preferrred shares last month. Whatever new financing he manages to attract will undoubtedly be loaded with covenants and conditions. The next couple of months will be interesting. For the sake of the thousands of LVS employees, I hope his efforts are successful.

November 7, 2008 8:11 AM Posted by Hunter

While this disclosure was likely required by auditors, they might not be in quite as dire of straights as it sounds but even if they are, I would think that current management would be better at keeping the trains running on time than some conservatorship.

I would assume a lot of the expansion plans would have to be at least put on pause, those projects like Bethlehem and Singapore are pretty far along.

November 7, 2008 10:56 AM Posted by David McKee

Yes and no, re: Bethlehem. The slot house is ahead of schedule and the construction crew has been further increased. The hotel and shopping mall have been mothballed, and an events center (the one component LVS is not contractually obligated to build) appears highly unlikely at this point.