Las Vegas Sands shares in the US rose on Thursday after the cash-strapped company announced it had applied for a possible listing in Hong Kong that is estimated would raise as much as $2bn this year.
The casino operator, controlled by tycoon Sheldon Adelson, said it had filed an application with the Hong Kong stock exchange but no decisions had been made regarding the timing or terms of any such offering, according to a filing to the Securities and Exchange Commission.
Las Vegas Sands has been considering a Hong Kong public offering of its Macao assets for some months as the company aims to raise funds to complete its partially built projects in the world’s biggest casino market.
The spin-off had been made possible after its bankers agreed to amend a $3.3bn credit facility last week, which allowed the company to sell a minority interest of its Asian businesses, while $500m of the proceeds must be used to repay debts.
Las Vegas Sands, which has been struggling to service its debts, also said its lenders had agreed to give it six quarters of relief from its covenants and the option of issuing up to $1.5bn in bonds.
While the company did not say how much it planned to raise in Hong Kong, JPMorgan analysts said the size of the listing, which could take place in late November or early December, was likely to be from $1bn to $2bn.
“We believe this moves LVS one step closer to a clearer path of much-needed improving liquidity and balance sheet de-levering,” said the analysts, who estimated that the company could sell 25 per cent to 30 per cent of the operations.
The share sale would be an important boost to the company’s balance sheet. Las Vegas Sands, which has opened two of the world’s largest casinos in Macao, has been forced to halt construction on some projects and slash thousands of jobs because of its financial problems.
Macao casino companies are experiencing a tough operating environment as the global financial crisis and Beijing’s visa policies dissuaded people from gambling. First-half gaming revenues dropped 12.4 per cent year on year to $6.4bn.
Las Vegas Sands shares rose 3.5 per cent to $13.19 on Thursday after earlier reaching a high of $13.47. The stock has jumped about 40 per cent this month.
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