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LAS VEGAS-Las Vegas Sands Corp. on Monday morning halted or delayed construction at most of its active development sites in the US and abroad. Citing “the capital markets and the global economy and their impact on ongoing operations,” the public company stated in its quarterly report that it will need to raise additional capital to complete those few projects it hopes to continue building.

In a conference call with analysts Monday afternoon, company president Bill Weidner said the company has lined up more than $2 billion in new capital, including additional funds from Sheldon Adelson, the company’s principal stockholder and chairman. The transaction is expected to close by the end of the week, at which time more details would become available.

In the US, Las Vegas Sands has stopped work on a $600-million, 400-unit, high-rise condominium tower it was developing on the Las Vegas Strip, in front of its new Palazzo resort, but will complete the retail podium. It also has stopped work for everything but the casino portion of its $700-million, 124-acre Sands Bethlehem development in Pennsylvania.

Overseas, the company has halted its $11-billion Cotai Strip development in Macau in lieu of project-level financing. The decision puts at risk its control over the entire project–including the properties it has already built–if it cannot extend the deadlines in its development agreement with the Macau government and obtain additional financing.

The company is not planning to stop work on Marina Bay Sands, its $5-billion-plus development in Singapore that includes 2,600 hotel rooms in three 50-story towers; a 750,000-square-foot enclosed retail, dining and entertainment complex; a 1.3-million-square-foot convention center, a bay-front promenade and, of course, a casino. The company closed on a $3.8-billion facility to fund most of the construction in January 2008. The company has spent $1.81 billion on the project to date and intends to open the resort in late 2009.

In April 2007, Las Vegas Sands increased the size of its Macao credit facility from $2.5 billion to $3.3 billion to continue funding the development of The Venetian Macao and the Four Seasons Macao as well as portions of its other Macao development projects. The company was in the process of arranging up to $5.25 billion of secured bank financing– to refinance the amount currently outstanding under the Macao credit facility and to provide incremental borrowings to fund the Four Seasons Private Apartments, the completion of the Four Seasons Macao and other Cotai Strip projects—but was unable to reach arrangements with its prospective lenders.

In May 2007, the company entered into a $5-billion US senior secured credit facility with respect to its Las Vegas operations. A portion of the proceeds from this facility were used to refinance the indebtedness collateralized by the company’s Las Vegas integrated resort, including the Venetian Las Vegas, the Palazzo, the Shoppes at the Palazzo and Sands Expo Center, and to fund the design, development and construction costs incurred in connection with the completion of the Palazzo, the Shoppes at the Palazzo, St. Regis Residences and Sands Bethlehem. The company had $600 million of available borrowing capacity under the facility as of Sept. 30.

Last week, the company in SEC documents said it is at risk of exceeding the maximum leverage ratio tied to its US senior secured credit facility and FF&E financings and needs to raise more capital. Without any changes to its operations, the company said Thursday it will exceed allowable ratio of net debt-to-trailing 12-month adjusted EBITDA for its Las Vegas properties in the fourth quarter, which could lead to a default. To avoid breaching the maximum leverage ratio in the third quarter, it completed a private placement of $475 million in convertible senior notes with its principal stockholder chairman Sheldon Adelson and his family.

With regard to the St. Regis condo tower in front of the Palazzo, the company says it will complete the multi-level podium, which already includes leased retail and entertainment space, but not the residences. It will consider recommencing construction when conditions improve, at which point it would take 18 months to complete the project. The cost to build the entire project was approximately $600 million. As of the end of the third quarter, the company had spent $86 million in construction costs and branding-related payments. The estimated cost to prepare the site for delay and to complete construction of the podium portion is approximately $95 million. Completion is slated for the first half of 2009.

At Sands Bethlehem, the company says it will continue construction of the casino component, which will open with restaurants, parking and 3,000 slot machines in mid 2009. Being suspended until conditions improve is work on a 300-room hotel, an approximate 200,000-square-foot retail facility, a 50,000-square-foot multipurpose event center and additional dining options. The cost to build Sands Bethlehem was estimated at $600 million, not including FF&E and pre-opening expenses. The company had spent more than $300 million as of the end of the third quarter and expects to spend an additional $145 million to open the casino component, including FF&E, pre-opening and other costs.

In Macao, the company is in the midst of developing several integrated resorts on 200 acres known as the Cotai Strip. Two of the developments–the 2,900-suite Venetian Macao resort and the Four Seasons Macao which just opened next door–are completed, and the company had commenced construction or pre-construction for the other resorts. The company has suspended work on all current construction projects but says it expects to complete a financing package in the next three-to-six months.

If it secures the financing, the company says it will take nine months to complete the first phase of its current developments, the Shangri-La and Traders tower and the first Sheraton tower, along with a podium that encompasses the casino, associated public areas, portions of the shopping mall and approximately 100,000 square feet of meeting space. The second phase, which includes the second Sheraton tower and a St. Regis-serviced luxury apartment hotel, has been suspended indefinitely.

The estimated total cost to build phase I and prepare the phase II components for delay is expected to be approximately $3.05 billion (excluding FF&E, pre-opening and other costs), of which $1.16 billion had been spent as of the end of the third quarter. If the proposed project-level financing is unsuccessful, the Company expects to incur approximately $900 million in costs to prepare the project for delay.

On another of the parcels, the company is required to develop by 2011 a 3,600-unit development that would include hotel rooms, serviced luxury vacation suites, a casino and a retail shopping mall. If the company is unable to meet the August 2011 deadline and the Macau government does not extend the deadline, the company could lose its right to continue to operate The Venetian Macao, Sands Macao, Four Seasons Macao or any other facility developed under its agreement with the Macao government, and its investment to date on these developments could be lost. As of the end of the third quarter, the company has capitalized $4.33 billion in construction costs on the Cotai Strip, including The Venetian Macao and Four Seasons Macao.

“We are currently negotiating the definitive agreement pursuant to which we will partner with this developer to build a multi-hotel complex, which may include a Cosmopolitan hotel,” the company stated in a recent SEC filing. “In addition, we have signed a non-binding letter of intent with Intercontinental Hotels Group to manage hotels under the Intercontinental and Holiday Inn International brands, and serviced luxury vacation suites under the Intercontinental brand, on the site.”

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