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MGM hires bank to sell casino assets: source

MGM hires bank to sell casino assets: source
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First Published: Mon, Apr 06 2009. 12 02 PM IST
Updated: Mon, Apr 06 2009. 12 02 PM IST
New York: MGM Mirage has hired Morgan Stanley to advise on selling a number of its casinos, and is talking to potential buyers about the assets, a source familiar with the situation said on Sunday.
The No. 2 casino operator, controlled by billionaire Kirk Kerkorian, is grappling with weak consumer demand and reduced access to credit. The casino firm is hoping to raise money to meet debt payments and also to fund a troubled project it jointly owns with Dubai World called CityCenter, the source said.
MGM Mirage, which said in March that its banks had agreed to waive debt covenants through 15 May, is also talking to lenders to refinance debt, the source said.
The company is in talks to sell its casinos outside Las Vegas including MGM Grand Detroit in Michigan and Biloxi’s Beau Rivage in Mississippi, the source said.
It is talking to a number of potential buyers including rivals in the same industry and private equity bidders, the source said. Those include Los Angeles-based private equity firm Colony Capital LLC and Australian gambling magnate James Packer, the source said.
MGM Mirage and Morgan Stanley could not immediately be reached on Sunday for comment. Colony and Packer’s casino firm Crown Ltd were also not immediately available for comment.
MGM Mirage reported in March a fourth-quarter loss of $1.15 billion as gambling demand declined, and it wrote down impaired assets. Earlier in the month, it warned that auditors had substantial doubt about the company’s ability to continue as a going concern.
The CityCenter project is a 67-acre residential, resort and retail complex on the Las Vegas Strip slated to open late this year. MGM Mirage last week made a $200 million payment to keep construction going on the project.
The Wall Street Journal reported on its website on Sunday that Packer is weighing a stake in CityCenter as part of an investment with Colony Capital. However, Packer’s Crown denied in a statement that it was considering an investment in CityCenter.
A source told Reuters last week that Colony is having early talks with CityCenter’s owners about a potential investment in that project.
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First Published: Mon, Apr 06 2009. 12 02 PM IST
More Topics: MGM | Morgan Stanley | Casino | Sell | Las Vegas |