Emergency move for Sands China Limited

In Macau and the local Sands China Limited subsidiary of American casino operator Las Vegas Sands Corporation has reportedly announced that it has accessed $201 million from its various credit facilities for ‘general corporate purposes.’

According to a report from Inside Asian Gaming, the Hong Kong-listed firm used an official filing to assert that it has an additional $1.54 billion in available credit while possessing the financial capacity to support its operations and development projects until ‘at least’ the end of the year. The source explained that the operator behind the enclave’s 3,000-room The Venetian Macao property has recently been suffering as China’s crackdown against the spread of coronavirus continues to limit travel to and from the mainland.

Envisioned exchange:

Sands China Limited is moreover responsible for Macau’s impressive The Plaza Macao, The Parisian Macao, The Londoner Macao and Sands Macao properties and reportedly divulged its recent draw down via a disclosure to the United States Securities and Exchange Commission regarding a planned exchange offer. The firm is purportedly looking to make $1.95 billion by swapping outstanding notes it issued in September for new instruments registered under the Securities Act of 1933 with no transfer restrictions.

Reportedly read the Sands China Limited disclosure…

“Based on current forecasts, we believe we are able to support continuing operations, complete the major construction projects that are underway and respond to the current coronavirus pandemic challenges for at least twelve months from the end of the reporting period. We have taken various mitigating measures to manage through the current environment including a cost and capital expenditure reduction program to minimize cash outflow for non-essential items.”

Pessimistic projection:

Inside Asian Gaming reported that this revelation comes just days after global brokerage and investments firm Morgan Stanley detailed that the six casino operators in Macau are likely racking up combined quarterly losses of approximately $250 million. As a result, this enterprise purportedly furthermore warned that SJM Holdings Limited could well end up running out of cash by the end of June with Sands China Limited and MGM China Holdings Limited likely having just nine months’ worth of reserves.

Counter conviction:

However, despite this depressed forecast and Sands China Limited used its American filing to conversely assert that visitation levels in Macau ‘will return to pre-pandemic levels’ so as to allow it to continue experiencing ‘meaningful long-term growth’.

The Sands China Limited disclosure reportedly read…

“We believe this growth will be driven by a variety of factors including the movement of Chinese citizens to urban centers in China, the continued growth of the Chinese outbound tourism market, the increased utilization of existing transportation infrastructure, the introduction of new transportation infrastructure and the continued increase in hotel room inventory in Macau and neighboring Hengqin Island. These factors should help increase the critical mass on the Cotai Strip and further drive Macau’s transformation into a leading leisure and business tourism hub in Asia.”