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Gaming Guru

Howard Stutz

Crown denies CityCenter report

7 April 2009

LAS VEGAS, Nevada -- Australia-based Crown Ltd. denied Monday it was planning to invest in the $8.7 billion CityCenter development, but MGM Mirage's talks with private equity firm Colony Capital appear to be moving forward.

Bloomberg News reported that Colony, which owns the Las Vegas Hilton and owns 75.9 percent of Station Casinos, might invest in MGM Mirage's corporate-level debt secured by taking out a lien on one or more of the company's casinos.

Joe Fath, a gaming analyst with fund manager T. Rowe Price, told the Review-Journal a deal might mean lenders would allow MGM Mirage to make an equity payment that is due on CityCenter next Monday, including the portion owed by Dubai World, MGM Mirage's 50-50 partner in the development.

Dubai World sued MGM Mirage last month, questioning the project's viability while seeking to be relieved of its obligations. MGM Mirage needed the approval of lenders to make a $200 million equity payment last month, including Dubai World's half, which kept the project from filing for bankruptcy.

However, Chapter 11 for CityCenter looms on Monday, which would halt the development's construction and put some 8,500 construction workers out of work, unless the equity payment is made.

Late Friday, the Wall Street Journal reported that Crown Ltd., which is controlled by Australian billionaire James Packer, was in talks to fund CityCenter. Crown recently suspended a deal to buy Cannery Casinos $1.75 billion.

In a statement, the company said it was not considering funding CityCenter.

"It is Crown Limited's policy not to comment on speculation," the company said in the Australian filing. "Crown is making an exception to its policy. Crown is not having any discussions with MGM or Dubai World with respect to any such investment in CityCenter."

A source told Bloomberg, however, that Crown is in preliminary discussions to participate with Colony in investing in MGM Mirage's corporate debt.

Crown denies CityCenter report is republished from