Las Vegas Sands Meets For Investment in Macau Casinos

Las Vegas Sands Corp. took steps to prepare for a possible buyback of its debt, while at the same time announcing another departure of one of its top executives.

The company also said it is about to enter talks with Chinese investment groups that want to purchase stakes in Sands’ casinos and hotels in Macau, China’s gambling enclave.

Like other casino giants struggling with billions in debt taken on to fund elaborate expansions, Sands is looking for ways to raise cash to meet its coming loan obligations and it may seek to buy back as much as $800 million of bank loans.

Shrinking gambling revenue forced the company to halt construction of a $12 billion development in Macau, the only place in China where gambling is legal. Adelson, who has quarreled with his executives over strategy, is seeking investors to complete the project while also looking for ways to lower debt. With permission from lenders, Las Vegas Sands could retire debt at a discount to its face value.

“Buying back something of your own that’s selling cheap” is one motivation for a potential repurchase, Adelson said. “The other opportunity is to reduce the thing and give us more wiggle room on our covenants.”

Internal conflicts have led to the loss of high-level executives at the Las Vegas-based company, including the resignation of Bradley H. Stone, executive vice president and president of global operations and construction, disclosed in a regulatory filing today.

Stone’s departure follows the termination of President William Weidner this month, and the subsequent resignation of director James Purcell, who objected to the Weidner’s firing over conflicts with Adelson.

Buyback Financing

Las Vegas Sands climbed 40 cents, or 15 percent, to $3.05 today in New York Stock Exchange composite trading, boosted by a Standard & Poor’s Leveraged Commentary & Data report about the debt buyback citing unidentified sources.

The company would finance a buyback with cash holdings of about $2.8 billion, said Adelson, who raised $2.1 billion in November, including his own money.

The buybacks would be conducted via a modified Dutch action that would establish a $25 million face-value minimum on each offer, the company said in today’s filing with the U.S. Securities and Exchange Commission. The program would be in effect through September 2010.

The effective date and terms of Stone’s resignation haven’t been determined.

‘Serious People’

Adelson met with a group of companies from Hong Kong and other Asian countries are considering investing in Las Vegas Sands’ operating Macau properties, the Sands, Venetian and Four Seasons, he said.

He also met with two construction companies that may invest in the stalled construction of Macau phases five and six on the Cotai Strip to get the buildings finished, Adelson said.

“They are serious people, we believe they have the money and they’re going to start due diligence process now,” Adelson said today, declining to identify any of the potential investors.

Las Vegas Sands will sell two Macau malls and expects initial bids by April 15, Adelson said. Some investors have suggested keeping the properties until retail and real estate markets recover, he said.

“No option is going to be off the table,” Adelson said. “There’s no assurance that anything’s going to be done. There’s probably as good a possibility of something not being done.”