Casino project: Singapore govt expected to step in

SINGAPORE: Singapore's government may form a venture with CapitaLand Ltd to take over one of the island's two casino-resorts if Las Vegas Sands Corp fails to stave off loan defaults, CIMB-GK Research Pte said.

Las Vegas Sands, the gaming company that said last week it may default on debt and face bankruptcy, reiterated last Saturday that it's committed to the US$4 billion (US$1 = RM3.54) Singapore resort.

The company has drawn down at least S$2 billion (S$1 = RM2.38) from a S$5 billion credit facility by several banks for the project.

If Las Vegas Sands cannot cough up its share of equity, the Singapore government is likely to step in," Donald Chua, a Singapore-based analyst at CIMB-GK, wrote in a report yesterday. "A viable option could be a 49:51 joint venture between the government and CapitaLand, with CapitaLand taking a controlling stake in the project."
Las Vegas Sands was one of two gaming companies that won the right to build resorts in Singapore after the city-state lifted a four-decade ban on casinos in 2005 to diversify the economy and create jobs.

The company said last week it faces "substantial doubt" about its ability to survive and may be short of cash for US$16 billion of projects in Asia.

Las Vegas Sands, in a statement yesterday, declined to comment on its earnings announcement.

Meanwhile, CapitaLand said in an e-mail it hasn't held any discussions with the Las Vegas-based company, adding that it's seeking investments in the "continuing global recessionary environment".

"CapitaLand wishes to clarify that no discussion has transpired between itself and Sands," it said in a statement.

By Agencies