MGM says able to make payments for venture
ATLANTA (Reuters) - MGM Mirage, which last week made a $200 million payment to keep construction going on an $8 billion Las Vegas complex, said on Wednesday that it is able to meet its funding obligations to the development.
"We are ready, willing and able to make the payments that are required of us under our partnership agreement with Dubai World, subject to our banks' approval," Alan Feldman, MGM Mirage senior vice president of public affairs, told Reuters.
MGM said it obtained a waiver from its lenders last week enabling it to make the payment to satisfy required equity contributions to the CityCenter project, a 67-acre residential, resort and retail complex on the Las Vegas Strip slated to open late this year.
MGM disclosed its payment after sources had feared CityCenter was preparing to file for bankruptcy.
The waiver from senior lenders allowed MGM, which is controlled by billionaire Kirk Kerkorian, to cover $100 million that should have been funded by state-owned investor Dubai World, the casino company's partner in the 67-acre, multi-tower project on the Las Vegas Strip.
The payment brought the remaining equity contribution needed to access a $1.8 billion CityCenter credit facility to about $800 million, MGM Mirage said.
In a regulatory filing, MGM said CityCenter lenders have waived through April 13 certain and potential defaults tied to required equity contributions under the project's credit facility. It said it would work with its lenders, Dubai World, and CityCenter to obtain necessary waivers before that date.
But it added that there can be no assurance that any waiver or amendment will be available, or that the CityCenter project would not seek relief through bankruptcy.
Dubai World sued MGM Mirage over the venture in Delaware Chancery Court last week, seeking to be relieved of payment obligations to CityCenter and complaining that MGM had mismanaged the project.
Investment firm Colony Capital LLC is having early discussions with the owners of the Las Vegas CityCenter development about a potential investment in the project, a source familiar with the situation said on Wednesday.
MGM said last month that it was looking to take actions that included asset sales in a bid to reduce debt.
MGM shares closed up 30 cents, or almost 13 percent, to end the day's trading at $2.63 on the New York Stock Exchange, well off its 52-week high of $62.90 reached on April 2, 2008.
(Reporting by Karen Jacobs, with additional reporting by Megan Davies in New York; Editing by Leslie Gevirtz, Bernard Orr)
