Las Vegas Sands Corp plans to launch an initial public share offering in Hong Kong to raise up to USD2.5 billion, according to the South China Morning Post.
Analysts expect LVS to use its Hong Kong listing proceeds to pay off part of its USD10.8 debt. This may provide the necessary leverage to allow the company to restart work on Cotai plots five and six. Work there was suspended late last year when the company’s auditors issued a warning to US financial regulators regarding LVS’s status as a going concern following the global financial crisis.
The company has not so far commented on the SCMP report. The IPO still needs approval by the stock market regulator in Hong Kong, according to the newspaper, but that is regarded in investment circles as a formality.
Sources claiming knowledge of the LVS plans reportedly told the newspaper the Las Vegas-based company expects to launch the IPO in about four weeks from now—i.e., mid-November.
Sources close to Goldman Sachs, one of the finance houses managing the IPO, briefed some media organisations in the summer that LVS would seek to list a unit in Hong Kong. Wynn Macau’s successful launch last week is likely to have given encouragement to the LVS management that the local market has the ‘legs’ to support another major casino company share offering and the liquidity and appetite pay for it.
On its first day of trading, Wynn Macau’s stock rose 6.9 percent above its HKD10.08 offer price to close at HKD10.78, confounding the expectations of those analysts who argued the stock had been priced too aggressively at launch.
Renewed investor appetite for Macau-linked securities was in evidence, however, even before Wynn’s local IPO. In August, LVS struck a debt exchange deal with its lenders in order to restructure the finances of the local operation. In the deal, the maturity on USD3.3 billion in Macau debt was extended in return for higher interest payments.
In September, LVS raised USD600 million in pre-flotation financing by selling bonds to investors that could convert into shares in the Macau unit following a stock market listing in Hong Kong.
