Inside Asian Gaming

11 During the earnings call, Mr Adelson confirmed LVS had no plans to issue new equity to fund Cotai, but stopped short of saying he would write a personal cheque to cover development. He did, though, make it clear that plans to reorganise the project financing for The Cotai Strip™ would not fall down, whatever obstacles the global liquidity crisis might throw in its path. Asked by Celeste Mellet Brown of Morgan Stanley whether he would “back stop” the Cotai project, Mr Adelson stated:“My lawyers have cautioned me what I can say and what I cannot say. However, as I said back in ‘99, we’re not going to have any problems, and I’ll say it again. We’re not going to have any problems. Those of you who want to believe it will act accordingly, and those of you who don’t want to believe it will act as they want.” In a joking reference to the lofty US Olympic basketball teamwho were in Macau at the same time preparing for the Beijing games, Mr Adelson added:“One of my closest friends says, ‘Sheldon, don’t worry about your height. You’re the tallest person I know when you stand on your wallet’. “And I’m saying right now the company will not have liquidity problems. Need I say more?” Heavyweight LVS is probably too big and too important to the international banking system, the US stock market and the economies of Macau and Singapore to be at risk of funding difficulties. Analysts may not currently be dancing in the streets over LVS’s performance in the last three quarters, but with Macau gaming revenue growing at more than 50% year-on-year in the first half of 2008, lending institutions have plenty to gain from helping the company cope with its Asian growing pains. This is likely to create the necessary goodwill to ensure continued capital funding at a price that won’t make shareholders flinch. LVS plans to raise US$5.25 billion to complete the next phase of The Cotai Strip, says President and Chief Operating Officer Bill Weidner. This will include what LVS refers to as an “accordion feature” allowing phased draw down of funding to be timed with work on the site. Mr Adelson also indicated some plans were being revised, though didn’t specify whether this was in order to cut costs. Speaking via live link from his Venetian Macao property during the Q2 2008 earnings call, Mr Adelson said: “Contrary to some of the rumours that have been going around, we’re moving forward with our development pipeline aggressively.” Mr Weidner added: “We have recently hosted a bank due diligence meeting in Macau which was attended by about 180 principles representing approximately 40 banks from around the region and the world. In this round of funding we intend to raise a total of approximately US$5.25 billion, primarily, if not entirely, in the Asian bank markets. “The proceeds of the financing will refinance our US$3.3 billion Macau credit facility, allow us to complete the construction of site five and six on the Cotai Strip, and continue design and development work on sites seven, eight and three. The marketing of the transaction is now under way, and we are making good progress. We’re utilising the formula we recently employed to raise capital in Singapore by inviting significant participation from the regional Asian banks, European banks with a focus on the Asia marketplace, and a handful of institutions domiciled in the United States.” Funding the Future There are still plenty of finance houses willing to bankroll Cotai, says LVS My Word is My Bond Sheldon Adelson issues a rallying call on Cotai funding Feature