p16-18 Macau 27/11/08 08:37 Page 14
MACAU BUSINESS
Cotai Blues
.macaustockphoto.com
www
A huge spanner has been thrown into the works of
Macau’s
©
Macau's casino
Image
engine on the Cotai Strip as credit dries up, projects slow or freeze
and the city as a whole slides into economic gloom. Paulo A.
Azevedo reports with Olívia Alonso
I
t's a definite sign of the times, the investors has led to two meetings between Las and Company's analysts said they were
previously red-hot Cotai Strip has hit the Vegas Sand's boss Sheldon Adelson and Chief optimistic that MGM and Dubai World, which
financial equivalent of a brick wall. A Executive Edmund Ho hau-wah, followed by are currently building City Center on the Las
signficant number of the projects planned another between Adelson and Francis Tam, the Vegas Strip, will obtain the US$ 700 million
for the prime site are way behind schedule, secretary for finance and economy. (MOP5.59 billion) they are looking for to fully
others have stopped completely and a few more At the recent opening of local businessman fund the project.
will only proceed when the crisis recedes and David Chow's Legendale Hotel in Beijing, the MGM say they recently received a US$1.8
its negative impact on investor confidence and dark clouds hanging over the gaming sector billion loan along with bank commitments for
the banking sector eases off. were very at the top of the list of conversations an additional US$500 million in funding for
They could have a long wait. between Steve Wynn and Francis Tam, despite the City Center project.
A number of sources Macau Business has the fact that the American billionaire sits in a The Cotai project may have to wait because
spoken to are adopting a "wait and see" more confortable position than his arch-rival construction hasn't even started. Therefore, the
strategy which could lead to recently finished Adelson, as all he has to worry about is finalising company is under less pressure and, in the
buildings not actually being used but kept in the construction of Wynn Resort's second tower. foreseeable future, has only to worry about
cold storage for better times. In the Chinese capital, Steve Wynn explained revenues from the only property it owns on the
These project financing difficulties and the to Macau Business: “We are very secure, have a Macau peninsula.
slowdown of the local economy – underlined by very well-balanced balance sheet because we However, as Dow Jones reported late in
China's individual visas restriction – are also were less aggressive then some others.” October, MGM Mirage’s net income fell 67 per
raising concerns outside Macau. In this less stressfull situation, Wynn even cent in the US's third-quarter and the company
Singapore is also anxious to know all about found the time to wish his fiercest competitors said it was suspending plans to build new
the dangers of the huge drop in gaming stock good luck: "I certainly hope that all of the casino properties in Las Vegas and Atlantic City
prices, particularly those of Las Vegas Sands, as other developers of resorts in Macau find a way because of the credit crunch.
well as how difficult the big players are finding to deal with the problems properly,'' he said. Former MGM chairman and chief executive
raising the finance they need. Wynn can also took advantage of the Terry Lanni told Dow Jones that pre-
moment to get public plaudits by saying that if development work has been done on the MGM
Emergency meetings his competitors are able to get through their Grand Atlantic City, but the company will halt
troubles, the most important objective of all – development until the economy and capital
The crisis has prompted several "emergency "to protect the jobs of those in the business'' – markets "are sufficiently improved''. MGM has
meetings" at the highest level aimed at finding will have been achieved. been struggling to find financing to complete
formulas which will enable companies to face construction of its US$11 billion City Center
the fast-approaching instability and danger, but Not all gloom project on the Las Vegas Strip.
also to map out strategies to avoid panic among As for Sociedade de Jogos de Macau (SJM),
analysts, investors and banks – although it may Despite the gloom, Melco Crown as publicly they are not expecting many headaches from
be a little too late for that. declared that its City of Dreams "remains on the current economic meltdown: "We are
The idea is to prevent any breakdown that target to open to the public during the first leveraged, we have very little debt and we are
may force the gaming operators to default on half of 2009". not under financial pressure,'' company
their financing payments, either because profit "Construction activity will be maintained at director Ambrose So said.
margins are too narrow or because gambling in maximum capacity through to the end of 2008 "SJM is not slowing and we are not cancelling
Macau may stop generating the billions that, to deliver the construction timetable to any projects. As you know our number one
until a few months ago, seemed never-ending. completion,'' the company in a note sent to project is the redevelopment of the Hotel Lisboa
Already, the financing problem and the quest investors on 17th October. and we have picked our shortlist of designs. This
to find ways to alleviate the pressure on In a note sent to Macau Business, Jefferies takes some time as will full construction. We
16 DECEMBER 2008
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60