parent company, Las Vegas Sands Corp., has on Tuesday
(Macao time) announced its third
quarter results. Those results showed that our financial performance in Macao remained strong in
Q3, and that we maintained strong profits and grew visitation to The Venetian
Macao Resort Hotel to around 6.6 million in the quarter. We were satisfied that
we had performed well in Macao, against the
trend of the economic downturn and the overall slowing in visitation to Macao from major source
quarterly report also gave an update on Las Vegas Sands’ capital adequacy as
well as strategy going forward in this economic climate. I believe it is an
appropriate time for me to highlight some of the key points and to say a few
words on its meaning to our business here in Macao.
Financial status of the company
company announced that it achieved a capital-raising of US$2.14 billion. This
injection of capital fully funds the ongoing operation of the company and the
equity contributions required under the project financing for our project at The
Marina Bay Sands in Singapore.
This removes the suggestion that our parent company might be in breach any of
its debt covenants, or might be insolvent. The fact that the capital raising
was over-subscribed within a few days of its announcement under the current
economic climate serves to show that there is strong market support for the
company and confidence in its future.
did not seek to fund the continuation of construction of Parcels 5 and 6 with
this new capital. Instead, we advised investors that it would be funded through
project financing to be secured under appropriate terms. It does fully fund the
contractual and supplier obligations we have incurred in the construction to
date, and we can assure our contractors, suppliers and staff that we will
discharge any obligations already incurred.
company has announced that it will suspend the construction work of Parcels 5
and 6 and focus its energy on optimizing the performance the existing
businesses in Macao and completing the
development of the Singapore
project. This is an appropriate response to the downturn in the global economy and
the problems in the credit markets. This move also aligns the
the Macao SAR Government’s intention to slow down the pace of development of
the gaming industry.
company is working with a syndicate of banks to arrange for a US$1.5 billion to
US$2 billion project financing for Parcels 5 and 6 of the Cotai Strip project. The
funding being sought will cover the cost of completion of Phase 1 of the Parcels
5 and 6. When the project financing arrangement is in place, we can resume the
work on this project.
Implications on stakeholders
current suspension of construction will inevitably impact on construction
workers, suppliers and contractors. Before the decision to suspend Parcels 5
and 6 was made, the company had already responded to a request of the Macao SAR
Government to cancel work permits for foreign construction workers. Following the
announcement, we are now working with the Macao SAR Government and the
contractors to arrange for the departure of foreign laborers. We are also
working closely with the Government to find ways to help the local construction
workers. We shall ensure that all construction workers affected by the
suspension will be compensated according to law and contractual terms. We have
asked contractors to retain local Macao
workers at our cost while we conduct an assessment as to what extent we can
transfer them to other projects, or engage them in the management of certain
works on Parcels 5 and 6 to preserve the existing works during the suspension.
We expect that process to be conducted over the next one or two weeks. We are
committed to giving preference to reemploy qualified Macau
construction workers when we resume construction work. We shall also honor our
contractual obligations to contractors and suppliers.
we are able to raise capital through share offering, the challenge is to raise
debt financing when the banks themselves are suffering insufficient liquidity
in the banking system. To enhance our ability to raise project financing in the
current economic climate we will be reviewing other ways to reduce costs and
properly steward our shareholders capital.
the slowing of our development program, our commitment to Macao in the long term has not changed. Our
efforts to diversify Macao’s visitor base,
drive overnight visitation, and increase the length if stay in Macao will continue. It
remains our intention to build a critical mass of integrated resorts to facilitate
Macao’s transformation from a gaming city to Asia’s premiere destination for leisure and business