Las Vegas Resort Creates Corporate Restructuring Avoiding Bankruptcy

Project CityCenter HotelsLas Vegas resort creates corporate restructuring plan for debt issues.  MGM Mirage created a four level plan to help the company keep of their Las Vegas hotels and avoiding bankruptcy.

First, a complicated bond and stock offering will raise $2.5 billion for the resort and gaming operator.

The financial assistance was ok’d by their lenders, billionaire financier Kirk Kerkorian and the board of directors.  It will pay off $750 million line of credit, and relieve $1.05 billion from the $14.4 billion in long term debt.  Kerkorian’s interest will drop to 43 percent after the stock offering.

Before the New York Stock Exchange opened for trading the announcement of corporate restructuring plan had been announced.  This news affected MGM Mirage stock price by a decline of 14 percent.

Notes will be due in 2014 and 2017 secured by a lien on The Mirage and Bellagio hotels.  $2.5 billion will be a combination of $1.5 billion of private placement of senior notes and $1 billion in a public stock offering of 81 million shares.  This should resolve 2009 capital issues.

Earlier this year MGM Mirage sold the Treasure Island hotel for $775 million and reached a recent financial deal with joint venture Project CityCenter partner Dubai World.

Unless financial terms had been agreed to by June 30 a possible corporate wide bankruptcy could have been an option.

Las Vegas resort creates corporate restructuring avoiding bankruptcy.

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