* Sands seen struggling to raise $2 bln in loans by yr-end
* May further affect HK IPO valuations - analysts, brokers
* Risks to gambling sector still challenging - banker (For more Reuters DEALTALKs, click [DEALTALK/])
By Sui-Lee Wee and Stephen Aldred
HONG KONG(Reuters) - Las Vegas Sands Corp may struggle to secure up to $2 billion in financing for mothballed projects and dent already-lowered valuations for the planned Hong Kong initial public offering of its Macau operations, bankers and analysts said.
The world's most valuable casino operator needs the money to complete its two suspended projects in Macau, which have become major embarrassments and eyesores as the company prepares to raise up to $2.5 billion in a public offering. .
Sands Chief Executive Sheldon Adelson told Reuters in an interview last week that the company is in the process of securing financing to complete the two projects, which include mid-tier hotel brands, by 2011.
A source familiar with the situation said Friday the sites are key to Sands' goal of creating the critical mass needed to make Macau a major destination market.
The source said Sands would prefer to secure the project financing ahead of the IPO but is not depending on it.
"This is certainly a more challenging IPO and there's a lot of risks to it," said Susquehanna analyst Robert LaFleur, comparing the Sands IPO with a similar one for the less debt-laden Wynn Macau Ltd earlier this month. "They're already partially pregnant with their Macau projects."
Highly leveraged Sands has come close to violating loan covenants and suspended work on several projects as it navigates the credit crisis that began last year. Chairman and founder Sheldon Adelson has injected $1 billion of his own money into the casino operator.
Sands' high debt load means its stock needs to be valued more cheaply than Wynn Macau to attract investors.
"IPOs are still in demand in a buoyant market but one has to offer its shares at an even more attractive price to lure investment interest if its fundamentals are not so sound," said Ben Kwong, chief operating officer of KGI Asia.
The buzz among bankers is that the loan could fail to materialize before year-end and mark another setback for the company as it prepares to pass around the IPO hat.
Sands is tapping the loan market almost one year after canceling a $5.25 billion financing during the global crisis.
Its timing for the new loans is hardly ideal, however, as banks will be closing their books ahead of year-end and are reluctant to lend out in such huge sums, bankers said.
"The banks are taking a wait-and-see approach," said a senior banker from a Chinese bank. "Many are waiting to see which banks will indicate that they will take a substantial ticket."
ASIA ASSETS
Sands wants the money as the company, with long-term debt of about $10.6 billion, tries to wow the world with its gaming assets in Asia -- a huge growth market where it has several projects in Macau and one in Singapore.
The company has shored up its balance sheet through strict cost cuts, $600 million of exchangeable bonds and amendments to its $3.3 billion Macau credit facility.
However, nervousness about Macau's highly regulated gambling market and fickleness from China -- which supplies two-thirds of the enclave's gambling visitors --- are keeping potential lenders on the sidelines, bankers say.
That fickleness has been apparent in recent months, with China loosening visa restrictions for its citizens to travel to Macau, only to retighten them this month.
"Worrying signals on people crossing the border are not good for loan syndications," said one banker. "From a bank point of view, they undermine some basics."
Citigroup, Goldman Sachs Group Inc, Macau's Banco Nacional Ultramarino and Singapore's DBS Group Holdings Ltd would be the likely financiers of the loan for Sands, whose main Macau property is the Venetian, sources said.
Goldman had approached 25-30 banks, but only 15 attended the bank meeting in Macau last week, sources told Basis Point.
"Venetian Macau is just too big for its relationship banks to miss," said a loans banker, who is looking at the deal. "After all, it's the biggest project in Macau for the next few years to come, and you don't want to ruin the relationship with them."
Thursday, 5 November 2009
EBRD continues support for Ukrainian infrastructure
EBRD Press release:
The EBRD is continuing to support the transport infrastructure in Ukraine with a $27 million loan facility to finance the development of a logistics service centre in the area of the Black Sea Port of Odessa.
EBRD funding will contribute to improvements in the efficiency of container handling operations and promote the development of the inland infrastructure in the Port of Odessa. The financing will be provided to Euroterminal LLC, a company set up specifically to implement the project.
Based on a “dry port” concept for on-shore processing of containers, this will be the first such logistics centre in Ukraine directly integrated with container terminal facilities in the port via a recently completed flyover. The centre will consist of a container truck parking lot, a customs terminal and a container storage facility. The project will also help to regenerate the city’s industrial zone and to remove heavy container truck traffic from the city streets.
Sue Barrett, the EBRD’s Director for Transport, said: “The Bank is happy to support this important project, which will be the first of its kind in Ukraine and represents much needed private sector involvement in port infrastructure development in the country. More private initiatives in this sector will bring much needed expertise, capital and efficiency essential for the modernisation of Ukrainian transport networks”.
Ludmila Varavva, Euroterminal’s Director, said:”Despite today’s volatile market conditions, our company has taken the initiative to develop this ambitious investment project to provide better quality and more efficient services to shippers and cargo owners and prepare to meet future increase in cargo handling in the Port of Odessa. This is a strong signal for global business, pointing to an attractive investment climate in Ukraine and the Odessa region. It became possible due to concerted efforts of the Odessa Port Authorities, City of Odessa, Euroterminal LLC and the EBRD. It is a great honour for Euroterminal to have such partners. The EBRD’s support is clear evidence of our drive, determination and transparency”.
With this project, the total commitments of the EBRD to support the development of the Ukrainian transport sector will exceed €700 million. The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of 1 October 2009, it had committed €4.5 billion through 189 projects.
Link:
The EBRD is continuing to support the transport infrastructure in Ukraine with a $27 million loan facility to finance the development of a logistics service centre in the area of the Black Sea Port of Odessa.
EBRD funding will contribute to improvements in the efficiency of container handling operations and promote the development of the inland infrastructure in the Port of Odessa. The financing will be provided to Euroterminal LLC, a company set up specifically to implement the project.
Based on a “dry port” concept for on-shore processing of containers, this will be the first such logistics centre in Ukraine directly integrated with container terminal facilities in the port via a recently completed flyover. The centre will consist of a container truck parking lot, a customs terminal and a container storage facility. The project will also help to regenerate the city’s industrial zone and to remove heavy container truck traffic from the city streets.
Sue Barrett, the EBRD’s Director for Transport, said: “The Bank is happy to support this important project, which will be the first of its kind in Ukraine and represents much needed private sector involvement in port infrastructure development in the country. More private initiatives in this sector will bring much needed expertise, capital and efficiency essential for the modernisation of Ukrainian transport networks”.
Ludmila Varavva, Euroterminal’s Director, said:”Despite today’s volatile market conditions, our company has taken the initiative to develop this ambitious investment project to provide better quality and more efficient services to shippers and cargo owners and prepare to meet future increase in cargo handling in the Port of Odessa. This is a strong signal for global business, pointing to an attractive investment climate in Ukraine and the Odessa region. It became possible due to concerted efforts of the Odessa Port Authorities, City of Odessa, Euroterminal LLC and the EBRD. It is a great honour for Euroterminal to have such partners. The EBRD’s support is clear evidence of our drive, determination and transparency”.
With this project, the total commitments of the EBRD to support the development of the Ukrainian transport sector will exceed €700 million. The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of 1 October 2009, it had committed €4.5 billion through 189 projects.
Link:
Wednesday, 21 October 2009
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