Going concern doubts removed: Sands

Source : Business Times - 18 Nov 2008

Completion of stock and warrant offering provides it US$1.2b
Las Vegas Sands Corp said yesterday that doubts about its ability to continue as a going concern have been removed after the completion of an offering of common stock, preferred stock and warrants provided about US$2.1 billion of additional capital.

The Las Vegas-based casino operator’s independent accountants, PricewaterhouseCoopers LLP, said in a filing with the Securities and Exchange Commission (SEC) that the actions taken on Friday have helped to erase worries about the company’s ability to continue to operate.
Las Vegas Sands also said it reissued 2007 financials and now feels it has enough liquidity and capital resources to fund ongoing operations and fulfil its new development plans.

On Friday, Las Vegas Sands said it sold 200 million common shares for US$5.50 apiece for US$1.1 billion, which included 18.2 million shares purchased by the underwriters. The company also sold 5.2 million units consisting of one share of preferred stock plus a warrant to buy stock at US$6 a share. The units sold for US$100 each.

Founder and chief executive Sheldon Adelson and his wife also purchased roughly 5.25 million shares of preferred stock and warrants at the same terms as the public offering. The warrants included in the public offering and sale to the Adelsons could raise an additional US$1.04 billion.
In addition, the couple converted US$475 million in notes they purchased last month into 86.4 million common shares at a conversion price of US$5.50 apiece.

Las Vegas Sands did not seek shareholder approval for its financing plan, claiming an exception in New York Stock Exchange rules, even though it more than doubles the number of outstanding shares and significantly dilutes shareholder value.

The company warned that any delay caused by getting shareholder approval ‘would seriously jeopardise the ability to complete the offerings as well as the financial viability of the company’.
Las Vegas Sands said it planned to use proceeds to help fund construction and development projects, which it said would be significantly slowed down.

On Nov 10, the company said it would suspend construction at its US$600 million St. Regis condominium tower in Las Vegas and two sites on the Cotai Strip in Macau.
Several other casino operators have scaled back or abandoned development plans due to economic and credit conditions.

Las Vegas Sands is also looking to address some in-house concerns, disclosing in an SEC filing last week that its board created a committee to evaluate the company’s decision-making and resolve disputes between Mr Adelson and other senior managers. The filing said the committee was formed to address ‘a loss of confidence’ by managers in how the company is being run.