Buoyed by a slow but steady rise in its heavily discounted stock price, Las Vegas Sands Corp. this week made a number of fresh announcements likely to go down well with the markets.
First, LVS said this week it is talking to its bankers about the option of the company buying back up to USD800 million of its debt.
Second, Sheldon Adelson, Chairman and Chief Executive, gave a little more detail in an interview with the Associated Press about the four “new investors” he hinted at last week.
Mr Adelson stated he and Michael A. Leven, Bill Weidner’s replacement, as LVS’s President and Chief Operating Officer, recently travelled to China to meet with four groups enthusiastic about buying into the company. They included two construction companies interested in financing and building the two suspended hotel projects on the Cotai Strip in Macau in exchange for equity.
“They’re serious people with serious intent and deep enough pockets,” said Mr Adelson, although he cautioned it was too soon to announce anything concrete.
LVS said in its annual report for 2008 it had USD10.47 billion in long-term debt as of 31st December.
A debt buy back offer would undoubtedly be attractive to at least some of its lenders at a time when the financial sector in general is seeking liquidity. Some banks may be willing to listen to proposals for discounts on the dollar.
Mr Adelson stressed though to AP that the company only wants to have the option. It would be a way of potentially re-engineering the financial gearing of the company and thus heading off any risk associated with covenant breaches on residual debt. LVS doesn’t intend to repurchase debt immediately, he explained.
“We don’t have any intention now and we have no intention of having an intention in the very near future. Right now it’s not necessary for us to do this,” Mr Adelson told AP.
The company disclosed the discussions in a regulatory filing on Tuesday. The amendment would let LVS acquire debt outstanding through to 2010.
LVS shares rose 40 cents on Tuesday to close at USD3.05, up 15 percent. The previous collapse of LVS’s stock price—it traded at about USD125 in November 2007—has led to at least three lawsuits filed by shareholders alleging the board of directors failed to properly oversee the company—a claim LVS strongly denies.
