That is the PLan B
SINGAPORE -- Despite assurances from the developer, Singapore is looking for ways to avoid ending up with a mammoth unfinished project on a prominent piece of land if U.S. casino operator Las Vegas Sands Corp. is unable to complete a $4.9 billion gaming venture.
"This is supposed to be the new revenue source for Singapore, and we are faced with a situation where the developer and operator will delay the completion at best or could end up unable to fulfill the contract. There are alarm bells all over the place," said a person familiar with the matter.
[Marina Bay Sands] Bloomberg News/Landov
Las Vegas Sands is seeking $2.1 billion to complete and open its Singapore casino project, Marina Bay Sands.
The stakes were underscored Thursday by Sands officials in Macau. Stephen Weaver, Sands's president for Asia, said the company could lay off about 10,000 workers in China's gambling enclave. It said it would temporarily shut down two major construction projects along Macau's Cotai Strip, including a Shangri-La/Traders hotel tower, a Sheraton hotel tower and three casinos.
Sands said in a filing with the U.S. Securities and Exchange Commission last week that it was in danger of not meeting obligations to its lenders on a $3.8 billion portion of its debt unless it raises capital, cuts spending on developments or increases its Las Vegas earnings by year end. The company said it would halt or delay projects in Macau and the U.S. to conserve cash and concentrate on Singapore.
The gaming operator plans to raise $2.1 billion in a stock offering, with Chairman and Chief Executive Sheldon Adelson personally pumping $525 million into the share purchase. The company said the stock offering -- assuming it closes -- will allow it to finish and open the Singapore project as planned.
The Singapore Tourism Board, which oversees the Marina Bay Sands Casino development, said Thursday that it welcomes the commitment to Singapore. The Marina Bay Sands Casino, comprising a casino, hotels, convention, entertainment and retail facilities, is expected to create 10,000 jobs with an estimated annual operating profit of $1.26 billion by 2012.
Earlier this week, the tourism board said it had various options under its agreement with Sands, including to step in "and resume possession of the land...and any other structure on the land, and deal with them as STB sees fit" if the project closes down or if it enters receivership.
Singapore government officials are making contingency plans if the financing falls through, said the person familiar with the matter, who didn't elaborate.
"They are looking for a plan B if things turn sour. They won't allow a huge construction hole in downtown Singapore," this person said.
Singapore could be expected to take steps to keep the project alive, said Song Seng Wun, economist with financial-services firm CIMB Group. "The bottom line here is that if LVS can't finish this, someone else will," he said.
On Tuesday, Singapore's senior minister of state for trade and industry, S. Iswaran, said the government won't bail out the project if Las Vegas Sands goes bust.
Sands has secured a $3.8 billion loan from about 30 banks for the project.
—Patricia Kowsmann in Singapore contributed to this article.
SINGAPORE -- Despite assurances from the developer, Singapore is looking for ways to avoid ending up with a mammoth unfinished project on a prominent piece of land if U.S. casino operator Las Vegas Sands Corp. is unable to complete a $4.9 billion gaming venture.
"This is supposed to be the new revenue source for Singapore, and we are faced with a situation where the developer and operator will delay the completion at best or could end up unable to fulfill the contract. There are alarm bells all over the place," said a person familiar with the matter.
[Marina Bay Sands] Bloomberg News/Landov
Las Vegas Sands is seeking $2.1 billion to complete and open its Singapore casino project, Marina Bay Sands.
The stakes were underscored Thursday by Sands officials in Macau. Stephen Weaver, Sands's president for Asia, said the company could lay off about 10,000 workers in China's gambling enclave. It said it would temporarily shut down two major construction projects along Macau's Cotai Strip, including a Shangri-La/Traders hotel tower, a Sheraton hotel tower and three casinos.
Sands said in a filing with the U.S. Securities and Exchange Commission last week that it was in danger of not meeting obligations to its lenders on a $3.8 billion portion of its debt unless it raises capital, cuts spending on developments or increases its Las Vegas earnings by year end. The company said it would halt or delay projects in Macau and the U.S. to conserve cash and concentrate on Singapore.
The gaming operator plans to raise $2.1 billion in a stock offering, with Chairman and Chief Executive Sheldon Adelson personally pumping $525 million into the share purchase. The company said the stock offering -- assuming it closes -- will allow it to finish and open the Singapore project as planned.
The Singapore Tourism Board, which oversees the Marina Bay Sands Casino development, said Thursday that it welcomes the commitment to Singapore. The Marina Bay Sands Casino, comprising a casino, hotels, convention, entertainment and retail facilities, is expected to create 10,000 jobs with an estimated annual operating profit of $1.26 billion by 2012.
Earlier this week, the tourism board said it had various options under its agreement with Sands, including to step in "and resume possession of the land...and any other structure on the land, and deal with them as STB sees fit" if the project closes down or if it enters receivership.
Singapore government officials are making contingency plans if the financing falls through, said the person familiar with the matter, who didn't elaborate.
"They are looking for a plan B if things turn sour. They won't allow a huge construction hole in downtown Singapore," this person said.
Singapore could be expected to take steps to keep the project alive, said Song Seng Wun, economist with financial-services firm CIMB Group. "The bottom line here is that if LVS can't finish this, someone else will," he said.
On Tuesday, Singapore's senior minister of state for trade and industry, S. Iswaran, said the government won't bail out the project if Las Vegas Sands goes bust.
Sands has secured a $3.8 billion loan from about 30 banks for the project.
—Patricia Kowsmann in Singapore contributed to this article.
