April 22, 2009 > MGM pays $70M toward CityCenter, incl. Dubai share
MGM pays $70M toward CityCenter, incl. Dubai share
Submitted By AP Wire Service
NEW YORK (AP), Apr 17 _ Casino company MGM Mirage Inc. said Friday it has paid $70 million toward construction of the massive CityCenter project on the Las Vegas Strip, covering its own half of the payment plus $35 million owed by its equal partner, Dubai World.
MGM Mirage reached an agreement with its lenders on Monday that allowed the casino operator to cover Dubai World's share and delay paying until Friday.
The $8.7 billion project, which includes hotels, a casino, condos and retail space on 67 acres, is scheduled to start opening later this year.
The two partners _ Dubai World, the Arab state of Dubai's development arm, and MGM Mirage _ have another payment of more than $200 million due within two weeks.
A story published on the Web site of the Wall Street Journal on Friday said MGM and Dubai World had agreed to terms that would ensure CityCenter is completed. Any deal, however, must be approved by the project's lenders.
The newspaper, which said details were unclear, cited ``a person with knowledge of the talks.'' MGM Mirage spokesman Gordon Absher declined to comment on the report but said the company was having ``productive conversations'' with its partners and lenders and remains ``enthusiastic'' about the project.
The news drove a late-afternoon spike in MGM Mirage's shares, which had been down sharply for most of the session after the Wall Street Journal reported Thursday evening that billionaire investor Carl Icahn wants the casino operator to file for bankruptcy protection.
MGM Mirage is struggling with a sharp drop in consumers' spending on gambling and a debt load of more than $13 billion. The company lost $855 million in 2008.
MGM Mirage shares rose 40 cents for the day, or 6.2 percent, to close at $6.30, after dropping as much as 18.5 percent. The stock has ranged between $1.81 and $53.67 during the past 52 weeks.
Citing unnamed sources, the Wall Street Journal reported Thursday that Icahn and private-equity fund Oaktree Capital Management are pushing the company to restructure its debt as soon as possible.
The newspaper said Icahn _ an activist force on Wall Street for more than four decades _ and Oaktree and have recently bought hundreds of millions of dollars in MGM Mirage debt.
Any restructuring agreement would have to have the consent of billionaire Kirk Kerkorian, MGM Mirage's majority shareholder.
An Oaktree representative did not immediately respond to a request for comment Friday.
Dubai World sued MGM Mirage last month, saying the casino company's statements about its own financial health put CityCenter at risk. Dubai World said it was particularly concerned about comments in MGM Mirage's annual report warning that it could default on its debt and be forced to seek bankruptcy court protection.