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DOW JONES NEWSWIRES
MGM Mirage (MGM) and Dubai World have revised their Las Vegas
joint-venture and also reached agreement with lenders of the
CityCenter project that will fund the $8.6 billion project's
completion.
Dubai World sued MGM last month, alleging the casino operator
breached the terms of their venture, citing cost overruns among
other matters. Since that time, MGM paid Dubai World's share of
recent construction costs, totaling $135 million.
The Persian Gulf investment vehicle will reimburse MGM for that
and will fund its original commitment to the project, which
includes two condo towers, a 4,000-room resort casino and two
smaller luxury hotels.
The suit will be dismissed, and the deal with lenders includes
them fully funding a $1.8 billion credit line immediately that is
key to completing the project, which is still set to open in
December. To ensure MGM can fund its remaining portion of the
project costs, held as collateral will be the company's aging
Circus Circus casino and adjacent land.
The financing woes at CityCenter are part of a bigger picture at
debt-laden MGM Mirage, which in recent weeks has looking at further
asset sales and a debt restructuring to lower its leverage levels,
which stand at nearly $14 billion. Servicing that debt comes amid
slumping casino revenue, in particular in Las Vegas.
MGM share were halted around 3 p.m. at $6.18, up 6.6%. There was
no after-hours trading.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com