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Worries subside for Las Vegas Sands

18 November 2008

LAS VEGAS, Nevada -- Las Vegas Sands Corp. told investors it has begun righting its listing financial ship with $2.1 billion in new capital, but the casino operator's president said the company should have moved into calmer waters sooner.

In comments at an investment forum Monday, Las Vegas Sands President Bill Weidner said, "We had to do what we had to do to put ourselves in a position to survive."

In a morning filing with the Securities and Exchange Commission, the operator of The Venetian and Palazzo said its auditors have removed the "going concern" language from Las Vegas Sands' financial filings.

The company and its auditors believe the casino operator, which runs three resorts in Macau, has enough liquidity and capital resources to fund continuing operations and to fulfill its new development plans. Las Vegas Sands' independent accountants, PricewaterhouseCoopers, said in the filing the actions taken Friday helped to erase worries about the company's ability to continue to operate.

On Friday, Las Vegas Sands completed an offering of common stock, preferred stock and warrants.

Weidner was asked during the investment forum why Las Vegas Sands didn't raise the needed money sooner.

"It was a matter of robust debate within the organization," Weidner said. "There are several of us who have very strong opinions. It was pretty much a monumental screw-up."

In an SEC filing last week, Las Vegas Sands said its board formed a committee to evaluate the company's decision-making and resolve disputes between Chairman and Chief Executive Officer Sheldon Adelson and senior management. The filing said the committee was formed to address "a loss of confidence" by managers in how the company is being run.

"I think you can think of it as a junkyard dog fight," Weidner said, adding the infighting was similar to what happens at other companies.

"The board wanted to have more involvement in the process and we welcomed that," Weidner said. "We could use more financial brainpower in the process as well."

Las Vegas Sands shares rose 42 cents, or 6.87 percent, to close at $6.53 on the New York Stock Exchange.

In a note to investors, UBS gaming analyst Robin Farley said the capitalization would materially affect Las Vegas Sands' earnings per share. She said the capital more than doubled the number of outstanding shares and significantly dilutes shareholder value. Adelson saw his 65 percent majority stake in the company reduced to just over 51 percent.

According to MarketWatch. com, Las Vegas Sands has 537.29 million shares outstanding. Farley said the capital program would not affect the company's cash flow.

On Nov. 10, the company said it would slow the pace of its development and suspend construction at its $600 million St. Regis condominium tower on the Strip and two sites on the Cotai Strip in Macau. Las Vegas Sands will focus available capital on completing the $5 billion Marina Bay Sands in Singapore and the Sands Bethlehem casino in Bethlehem, Pa.

More than a week ago, Las Vegas Sands said it was in danger of defaulting on $5.2 billion in credit facilities.