April 10, 2009 / 11:04 PM / 11 years ago

Dubai World offers MGM plan to save City Center - WSJ

NEW YORK, April 10 (Reuters) - Dubai World has offered a plan to save the struggling 67-acre City Center Las Vegas resort development and its relationship with partner MGM Mirage (MGM.N), the Wall Street Journal reported on Friday, citing people familiar with the proposal.

The $8.6 billion Las Vegas Strip resort and casino development is in danger of shutting down, due to financing woes and a dispute between the joint owners, the Wall Street Journal reported.

The new proposal calls for Dubai World, MGM Mirage and bank lenders to commit to the $3 billion needed to finish the project and remove any uncertainty about future funding, those people told the Wall Street Journal.

The Journal said details of the proposal were not available, but a full funding commitment from all parties would likely mean that banks would forgo an earlier agreement to release a $1.8 billion loan only after MGM Mirage and Dubai World had put in more cash of their own. The arrangement would also preserve the project in the event of an MGM Mirage bankruptcy, the Journal reported.

Earlier this week, talks between Colony Capital LLC and MGM, regarding a potential investment by the real estate private equity firm, broke off.

MGM Mirage, the No. 2 casino operator, is trying to find ways to service its $13.5 billion debt and fund payments on its $8.6 billion City Center project in Las Vegas.

Controlled by billionaire Kirk Kevorkian, the company is grappling with weak consumer demand and reduced access to credit.

Australian gambling company Crown Ltd (CWN.AX) has also backed away from investing in MGM Mirage for the time being, the Journal reported earlier this week.

Crown said on Monday it was not in talks to invest in the Las Vegas project. (Reporting by Ilaina Jonas; Editing by Jan Paschal)

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