It seem that project CityCenter has been plagued by problems. Several construction deaths and costly mistakes and now the problem with Dubai World not honoring its financial commitments could spell the end for the project….at least as far as MGM Mirage is concerned. However, according to Reuters, investor Carl Icahn and private equity fund Oaktree Capital Management have stepped up and acquired hundreds of millions of MGM Mirage bonds. The deal will be a restructuring swapping debt for equity, done in concert with MGM’s majority shareholder Kirk Kerkorian to provide the additional funds needed by MGM Mirage. The deal still has to be approved by the lenders, but MGM Mirage has a very strong relationship with them going back several years.
MGM Mirage will be cutting it close. Some of their financial covenants are due to expire on April 29 and May 15. Should those defaults come about, MGM Mirage would be forced to file for Ch. 11 bankruptcy protection.
If this deal doesn’t go through, MGM Mirage may sell off other assets like the Beau Rivage in Mississippi or the MGM GRand in Detroit. MGM executives are firmly committed to completing CityCenter which is scheduled to open in October of this year. When completed, it will be the biggest LEED project in the state.
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