Shares of Las Vegas Sands Corp. plummeted more than 34 % Tuesday after the hotel and casino operator said it will suspend construction activity in Macau to help preserve cash and try to raise money for projects underway in Singapore and Pennsylvania. Las Vegas Sands also said it would make a public offering of 182 million shares of stock without shareholder approval.
The company said Monday that it will freeze construction on two sites in the Cotai strip, an area between two outlying islands off the Macau peninsula where the group operates the Venetian Macao.
"Given the current conditions in the global credit environment, we have elected to significantly slow the pace of development activities on the Cotai strip," William Weidner, Las Vegas Sands president and chief operating officer, said in a statement.
Shares of the company closed down USD -2.66 to USD 5.34 per share after being halted. That is on top of a Monday decline of 8%. A little more than a year ago, the stock was trading at the USD 150 level and scraped absolute bottom at USD 4.32 late last month.
The company also said in a news release that it plans to make a public offering of nearly 182 million shares of common stock, along with nearly 92 million shares of preferred stock. The preferred stock will go for an exercise price of USD 6 with common stock going for USD 5.50 a share.
And it will not seek shareholder approval for the offering, saying that "after a careful review of the facts, the members of the audit committee of the company's board of directors have determined that any delay caused by securing shareholder approval prior to the issuance of these shares of common stock in connection with the conversion of the convertible senior notes would seriously jeopardize the ability to complete the offerings as well as the financial viability of the company."
Further, Sands said that it hopes to raise USD 2.144 billion in capital, with the participation of the family of Sheldon Adelson, the controlling shareholder, to make sure the Singapore project is completed and to keep from violating covenants on its debt. Last week, the company said it was apt to be in violation of those covenants, raising fears of bankruptcy and sending the stock into a tailspin.
Weidner said he plans to resume development in Macau when the company is able to obtain capital on terms it deems acceptable. He won't be getting it from the Macau government.
The company said Monday that it will freeze construction on two sites in the Cotai strip, an area between two outlying islands off the Macau peninsula where the group operates the Venetian Macao."Given the current conditions in the global credit environment, we have elected to significantly slow the pace of development activities on the Cotai strip," William Weidner, Las Vegas Sands president and chief operating officer, said in a statement.
Shares of the company closed down USD -2.66 to USD 5.34 per share after being halted. That is on top of a Monday decline of 8%. A little more than a year ago, the stock was trading at the USD 150 level and scraped absolute bottom at USD 4.32 late last month.
The company also said in a news release that it plans to make a public offering of nearly 182 million shares of common stock, along with nearly 92 million shares of preferred stock. The preferred stock will go for an exercise price of USD 6 with common stock going for USD 5.50 a share.
And it will not seek shareholder approval for the offering, saying that "after a careful review of the facts, the members of the audit committee of the company's board of directors have determined that any delay caused by securing shareholder approval prior to the issuance of these shares of common stock in connection with the conversion of the convertible senior notes would seriously jeopardize the ability to complete the offerings as well as the financial viability of the company."Further, Sands said that it hopes to raise USD 2.144 billion in capital, with the participation of the family of Sheldon Adelson, the controlling shareholder, to make sure the Singapore project is completed and to keep from violating covenants on its debt. Last week, the company said it was apt to be in violation of those covenants, raising fears of bankruptcy and sending the stock into a tailspin.
Weidner said he plans to resume development in Macau when the company is able to obtain capital on terms it deems acceptable. He won't be getting it from the Macau government. The Associated Press reported Tuesday that in his annual policy address, Macau Chief Executive Edmund Ho said, "the government has no concrete measures to help it solve its financing difficulties immediately."
Las Vegas Sands reported Monday a USD 32.2 million loss in the third quarter, narrowing from a USD 48.5 million loss in the year-earlier period. The company managed to grow revenue substantially in both Macau and Las Vegas but the latter was due entirely to an expansion.
Several key metrics including the average daily room rate, occupancy level and revenue per available room were off by double-digit percentages, more evidence of drastic slowdown in visitor spending in Sin City. Las Vegas Sands said it would halt construction on sites five and six along the Cotai strip, without releasing further details. The company currently operates three casinos in the former Portuguese enclave.
The gambling giant is currently building a USD 4 billion casino and hotel complex in Singapore, known as Marina Sands, which is due to be completed in 2010. Writing about the offering, Bill Lerner of Deutsche Bank said that "while clearly dilutive, we view this event as a 'save the company' type transaction and expect it could be received favorably."
Las Vegas Sands reported Monday a USD 32.2 million loss in the third quarter, narrowing from a USD 48.5 million loss in the year-earlier period. The company managed to grow revenue substantially in both Macau and Las Vegas but the latter was due entirely to an expansion.
Several key metrics including the average daily room rate, occupancy level and revenue per available room were off by double-digit percentages, more evidence of drastic slowdown in visitor spending in Sin City. Las Vegas Sands said it would halt construction on sites five and six along the Cotai strip, without releasing further details. The company currently operates three casinos in the former Portuguese enclave.
The gambling giant is currently building a USD 4 billion casino and hotel complex in Singapore, known as Marina Sands, which is due to be completed in 2010. Writing about the offering, Bill Lerner of Deutsche Bank said that "while clearly dilutive, we view this event as a 'save the company' type transaction and expect it could be received favorably."
I really don't dare to think about it when the share prices of Las Vegas Sands Corp was recorded at USD 150 per share last year (September and October 2007) and now after 1 year the share prices was at USD 5.34 per share. This is a huge blow among all the investors who had invested in that company.
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