Las Vegas Sands in talks to finance Macau projects

By Dominic Whiting

MACAU/NEW YORK (Reuters) - Troubled casino company Las Vegas Sands Corp (LVS.N) said it was in talks with a syndicate of banks to raise between $1.5 billion and $2 billion to finance its projects in Macau.

Sands has suspended construction on its expansion in the Chinese gaming enclave and said it was laying off most of the 11,000 construction staff working on its Macau projects.

The U.S.-based company gave no timetable on when funding might be secured and when construction may resume.

Sands, one of the casino companies hardest hit by an economic slowdown that has ravaged the gambling industry, has seen its shares plummet from over $122 last December to under $6 on Thursday when it rose 31 cents to $5.41.

"We're working with a syndicate of banks to secure somewhere between $1.5 and $2 billion of project financing to complete phase one of parcels 5 and 6," Stephen Weaver, the firm's Asia president said, referring to the plots where Sands was building.

"We would not have suspended if we could see clarity on how long it would take to raise the funds," he told reporters in a briefing at the firm's Venetian Macao, which opened last year and is the world's largest casino.

Nearby, skeletons of the firm's planned new casino and hotel projects stood on a reclaimed piece of land called the Cotai Strip that Sands chief Sheldon Adelson wants to turn into a $15 billion Asian "neon alley" to rival Las Vegas.

The financial crisis has battered casino operators, and once mushrooming growth in Macau has slowed as visa restrictions on visitors from mainland China crimp business.

"We would have preferred not to suspend construction of plots 5 and 6 because we've always believed that a critical mass of hotel rooms ensures success here," Weaver said.

Hotels under the Shangri-La, Traders, Sheraton and St Regis brands are among those to be included in the planned expansion.

DOUBTS OVER FUTURE

Sands warned last week it was in danger of violating loan agreements. Also last week, the company's auditor said there were doubts about Sands' ability to continue as a going concern.

The company, which is also building a massive casino project in Singapore, said on Tuesday it had priced a public offering of 181.8 million common shares at $5.50 per share to raise about $1 billion to shore up its finances.

Analysts said Sands plans to raise a total of $2.14 billion in new capital.

Singapore said on Wednesday it may let Las Vegas Sands open its casino in the city-state in phases from end-2009 instead of all at once due to the difficult economic conditions.

Weaver said the company also is looking into spinning off its retail operations at the Venetian Macao into a separate company in order to raise funds.

"We're having discussions right now, and I couldn't predict when it will happen and how much we will raise," Weaver said of the retail plan.

(Additional reporting by Mark McSherry in New York; Editing by Tony Munroe and Brian Moss)