MGM mulling breakup to pay looming debts: report

CHICAGO Sat Mar 14, 2009 11:22am EDT

A sign for the MGM Grand casino stands in front of casinos (R) owned by the Mandalay Resort Group on The Strip in Las Vegas, Nevada, June 14, 2004. REUTERS/Steve Marcus/ Las Vegas Sun

A sign for the MGM Grand casino stands in front of casinos (R) owned by the Mandalay Resort Group on The Strip in Las Vegas, Nevada, June 14, 2004.

Credit: Reuters/Steve Marcus/ Las Vegas Sun

CHICAGO (Reuters) - MGM Mirage, which has warned it could breach its credit agreements this year if the economy doesn't rebound, may break itself up to lure potential buyers as it races to raise the more than $1.5 billion it owes in bond payments and interest this year, the Wall Street Journal reported on Saturday.

Citing unnamed people "familiar with the matter," the paper said buyers had been "sizing up" several of the casino operator's separate properties, including the Bellagio and the MGM Grand Detroit.

"Basically everything is for sale," the paper quoted one anonymous sources as saying.

MGM has said it is in talks with its bank lenders for a waiver on its loans or to amend the debts' covenants, but said there was no assurance that lenders will agree.

If the company is unable to amend terms or receive a waiver its bank lenders could accelerate repayment of the loans and, under certain circumstances, defaults on its other debt may be triggered, MGM has said.

(Reporting by James Kelleher)

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