Adelson's Las Vegas Sands may break loan agreement

LAS VEGAS - Las Vegas Sands Corp., the international casino empire run by billionaire Sheldon Adelson, must raise new capital or slash development spending, or both, by next month to keep its lenders at bay, the company said Thursday. News that the company might break its loan agreements sent its shares plummeting 33 percent.

Adelson, whose personal wealth is largely tied to his ownership in Sands, has seen his stake's value plunge along with the company's stock price, which has dropped 93 percent over the past year. At one point his shares were worth some $30 billion, making him this country's third-richest person, but as of Thursday's stock price that value had shriveled to $1.9 billion.

If Sands can't raise capital and does default on portions of its long-term debt, estimated at $8.8 billion by Thomson Reuters, the company said it would have to suspend some, if not all of its development projects.

Instead, the Las Vegas-based company hopes to boost earnings in its hometown, the company said in a Securities and Exchange Commission filing Thursday.

But casino revenue has been down for months in Vegas amid cutbacks on travel. Also, those who do come to here have gambled less and spent less on non-gambling activities.

The drop has been especially severe in Adelson's specialty, midweek convention business. As of August, overall convention business for all companies in Las Vegas had dropped 23.6 percent to $777 million for the first months of 2008.

The company said it is evaluating projects in various stages of development in Las Vegas, Pennsylvania, Macau and Singapore, and is meeting with a financial advisor to explore ways to raise capital.

Adelson, 75, worked as a financial adviser and real estate investor before building casinos. He created the technology trade show Comdex in 1979, which he sold it to Japan's Softbank Corp. for $860 million in 1995.

Adelson then bought the Sands Hotel and Casino, former home to the Rat Pack, in 1989. Seven years later, he was inspired by his honeymoon in Venice to erect The Venetian in its place, a $1.5 billion casino resort. The 4,027-room Venetian combined with the 3,066-suite Palazzo makes Las Vegas Sands operator of the largest property under one roof on the Las Vegas Strip.

The news from Las Vegas Sands's regulatory filing sent the company's stock plunging $3.81, or 32.7 percent, on Thursday to $7.85, far below the top end of its 52-week range of $122.96.

"This has the market spooked," said Robert LaFleur, an analyst with Susquehanna Financial Group.

Adelson and his wife, Miriam Adelson, personally loaned the company $475 million in October so Sands could escape a similar predicament in the third quarter. Company spokesman Ron Reese said it could not comment beyond its regulatory filings until it reports its third-quarter earnings this month.

In an interview in October, Adelson said Las Vegas Sands was looking to raise $2 billion in debt financing from Asian banks to finish work on some Macau expansion projects. The casino mogul controls nearly 70 percent of Las Vegas Sands personally and through family trusts.

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