Bondholders. Aye? Go figure.
I dunno about all that? Seems odd.
Wonder what Dubai feels about that suggestion as they have what... 4.3B already invested?
Dubai World to withhold CityCenter payments-source
Mon Apr 13, 2009 8:17pm
* Dubai World wants overall financing in place -source
* In talks with MGM Mirage on finance package -source
By Deena Beasley
LOS ANGELES, April 13 (Reuters) - Dubai World, joint venture partner with MGM Mirage (MGM.N) in the $9 billion Las Vegas CityCenter, will withhold payments toward the project until a comprehensive finance package is obtained, a source with knowledge of the matter told Reuters on Monday.
But the partners are now in negotiations to try to secure a longer-term financing solution for the project, said the source, who was not authorized to speak publicly about negotiations.
MGM said on Monday that it had secured a waiver from lenders so that it can pay about $70 million due to CityCenter contractors by Friday. [ID:nN13393798]
Las Vegas-based MGM said the amendment allows it to fund Dubai World's $35 million share of the high-profile Las Vegas Strip project, should Dubai World not do so.
Under a similar bank waiver, MGM last month paid $200 million -- the total of the two partners' obligations -- toward construction of the $8.7 billion CityCenter, one of the world's most expensive building projects.
State-owned Dubai World agreed in 2007 to purchase a 50 percent stake in CityCenter, for which it has so far spent $4.3 billion. The investor also holds a 9.4 stake in MGM itself.
As the global credit crisis sapped the availability of financing, the two partners agreed last year to jointly fund CityCenter construction costs until a $1.8 billion loan package kicks in this summer.
But Dubai World, taken aback by filings with securities regulators in which MGM said auditors had questioned its ability to remain a going concern, in March decided to sue the casino operator.
MGM, controlled by billionaire Kirk Kerkorian, has about $13.5 billion in outstanding debt and has been seeking for months to raise capital through asset sales and other means.
Dubai World, MGM and lenders, led by Bank of America Corp (BAC.N), "are in ongoing discussions to find a solution," with the ultimate aim of making sure that CityCenter is a viable project, the source said.
"Everyone is trying to figure out when the banks will start loaning, but not at loan-shark rates."
CityCenter, a multi-tower enclave of casinos, hotels, condominiums and shops, is scheduled to begin opening in October. (Reporting by Deena Beasley; Editing by Edwin Chan, Gary Hill)
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