MGM Mirage gets a Bankruptcy scare
19th March, 2009
The difficult financial times seem to be taking its toll on giant Las Vegas strip casino MGM Mirage.
According to Wall Street analysts MGM Mirage will do well to avoid applying for help from a bankruptcy court.
The casino has supposedly managed to stave off its lenders for two months, but is still looking at uncertainty as it lost $1.15 billion in the last quarter.
Robert LaFleur a Susquehanna gaming analyst suggested that it was unlikely MGM Mirage could produce ‘meaningful value for common shareholders’ and so was likely to need aid. The company operates 10 ‘strip hotel-casinos’ and is building another worth $9.1billion, but has announced to shareholders it has secured a 60 day waiver on debts.
The sale of MGM Treasure Island to Phil Ruffin for $775million is due to be completed at the end of March and will release some much needed funds.
It is still seeking a further $1.2billion to complete its CityCenter casino, and some analysts are suggesting MGM Mirage will have to sell other non gaming sections of its company in order to create more capital.
Steve Wieczynski a Stifel Nicolaus gaming analyst said that it was unlikely that MGM Mirage’s lenders would press the issue as they would not want” a technical default as they do not want to go through the bankruptcy process."
By Rommon
