Chairman and CEO Sheldon Adelson
CHICAGO (MarketWatch) -- Las Vegas Sands' woes rippled out to the gambling giant's workforce with thousands of jobs reportedly about to be lost in Macau as the company suspends some of its most ambitious projects in the Chinese territory.
Sands, fast running out of cash and unable to find more in the usual credit markets, will cut as many as 11,000 construction jobs, according to the Associated Press, as it halts work on parts of its planned $12 billion development in the former Portuguese territory.
On Tuesday, shares of Sands (LVS 5.58, +0.48, +9.4%) plummeted more than 34% after the company said it would halt new construction in Macau to preserve cash while trying to raise money for other projects underway in Singapore and Pennsylvania. It also said it would make a public offering of 182 million shares of stock without shareholder approval.
The stock was up 7% at $5.39 in early action. A little more than a year ago, the stock was trading at the $150 level and scraped bottom at $4.32 late last month.
Sands' public offering will also include 92 million shares of preferred stock with an exercise price of $6; common stock will go for $5.50 a share. The decision to not seek shareholder approval was due to a finding by the company's audit committee that any delay "would seriously jeopardize the ability to complete the offerings as well as the financial viability of the company."
Further, the company also hopes to raise $2.1 billion in capital, with the participation of the family of Chairman and CEO Sheldon Adelson, the controlling shareholder, to make sure the Singapore project is completed and to keep from violating covenants on its debt. Last week, the company said it was apt to be in violation of those covenants, raising fears of bankruptcy and sending the stock into a tailspin. See full story.
They are unlikely to get any help from the Macau government: The Associated Press reported earlier this week that in his annual policy address, Macau Chief Executive Edmund Ho said "the government has no concrete measures to help it solve its financing difficulties immediately."
On Monday, the company reported a $32.2 million loss for the third quarter, narrowing from a $48.5 million loss in the year-earlier period. It managed to increase revenue substantially in both Macau and Las Vegas, but the latter was due entirely to an expansion. Several key metrics, including the average daily room rate, occupancy level and revenue per available room, were off by double-digit percentages, more evidence of drastic slowdown in visitor spending in Sin City. See full story.
William Spain is a MarketWatch staff writer in Chicago.