Sands CEO aims to avoid debt default

By Deena Beasley

NEW YORK (Reuters) - Casino operator Las Vegas Sands (LVS.N) expects to avoid a debt default through a combination of cost cuts, the sale of two retail malls and increased business in Macau, Chairman and Chief Executive Sheldon Adelson said on Tuesday.

Without those actions, Sands, which operates the Palazzo and Venetian resorts on the Las Vegas Strip and has two casinos in the Chinese gambling enclave of Macau, could be in danger of violating loan covenants toward the end of the year, he said at the Reuters Travel and Leisure Summit in New York.

"We can't control very much the top line, but we can control the middle line and therefore the bottom line," said Adelson, who is also the company's majority owner.

Sands said last month it had raised its annual cost savings target to $250 million.

"We're going to try to squeeze out another $200 to $250 million and if we do that we are home free," Adelson said.

He said the latest round of operating cost reductions will come from cuts to outside consultants, legal expenses, travel and other spending.

"A million here, a million there and pretty soon you are looking at saving some serious money," he said.

Adelson said between 16 and 19 buyers have expressed interest in the Macau retail spaces and deals are likely in the next couple of months, although he declined to comment on prices.

The company is seeking to sell the retail mall at its Venetian Macau resort as well as the mall at its Four Seasons hotel in Macau.

Deutsche Bank analyst Bill Lerner said it is an "unfortunate time to have to sell" the properties, but Sands and Adelson do have a range of options for staying within covenant restrictions.

Under its Macau license, Sands can repatriate just 25 percent of the asset sale proceeds to the United States.

MACAU GAMBLING REVENUE DIPS IN FEBRUARY

Adelson also said he expects travel into Macau to pick up speed this year as Chinese government restrictions on visas for mainland Chinese are lifted.

He said he "feels confident," based on recent Chinese media reports suggesting that the governments of Hong Kong, Macau, and Guangdong province have decided to lift the restrictions.

Gambling revenue in Macau has dipped since the visa limits were imposed last year. The Lusa News Agency reported on Tuesday that February gaming revenue in Macau fell 15.5 percent from a year earlier.