Las Vegas Sands Corp. (LVS) is considering the sale of some of its Macau casino operations under a lease-back arrangement potentially worth $1.3 billion, according to a report Monday in the South China Morning Post citing unidentified sources.
The newspaper said the casino operator was considering the sale and lease-back of its signature gambling facility on the main Macau peninsula, the 229,000 square meter Sands Macau casino, which was completed in 2004 and marked the arrival of the Las Vegas Sands group as the first foreign-owned casino to open after the industry was restructured to welcome more operators.
Under the 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 how the casino performs, the report said. Discussions with potential buyers began last week, the report said.
Las Vegas Sands Spokesman Ron Reese said they will neither confirm or deny the report. But, he said, certain groups have approached the company about investing in their Macau operations.
Analysts said it would be an uphill battle to attract serious investors to a lease-back arrangement in view of rising competition from yet-to-be-opened casinos and the sluggish state of an industry hit by the economic downturn and tighter travel restrictions on mainland visitors.
On a quarterly basis, the Sands Macau is earning about $40 million before deductions for interest and taxes, according to estimates.
Las Vegas Sands is also reportedly attempting to sell some of its shopping malls in Macau, but so far those efforts haven’t been successful.
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