Las Vegas Sands In Trouble
More economic trouble has come to the Las Vegas Strip. Las Vegas Sands, the casino empire run by billionaire Sheldon Adelson which includes The Venetian and The Palazzo, is facing a tough decision. The company must either immediately raise new capital, cut development or perhaps both in order to satisfy loan agreements. Stock shares fell by a dramatic one third on the news that the company may break its loan agreements.
The stock's prices have plummeted over the past year dropping Adelson's personal wealth dramatically. Once his shares were worth around $30 billion but with the latest drop his stocks are worth less than $2 billion. It is estimated that the long-term debt at the Sands is $8.8 billion. The Sands currently has projects in Las Vegas, Pennsylvania, Macau and Singapore. Casino revenues that might have continued to fuel these projects in better times are also dropping quickly. Even the convention business, the bread and butter of Las Vegas has also dropped off as companies cut off all unnecessary expenses.
It's a tough break for Adelson, who worked as a financial adviser and real estate investor and created the technology trade show Comdex before getting into the hotel business in 1989 when the bought the Sands. The 4,027-room Venetian and the 3,066-suite Palazzo are two of the most popular places to stay on the Strip. As the AP reports Adelson controls 70 percent of Las Vegas Sands personally and through family trusts and so his fate is inextricably linked with the fate of the Las Vegas Sands but at this point it is not known if he will use his personal wealth to bail out the company.
UPDATE: The Las Vegas Sands has suspended their building projects on the Cotai Strip in Macau, laying off a potential 11,000 workers.