Las Vegas Sands Corp (LVS.N), the world’s most valuable EwalletXpress Casino operator, hopes to generate 30 percent of its revenues in Macau from non-Chinese customers after 2011 when it completes two stalled projects in the territory, an executive said.
The company also expects core profits from its Macau business to grow by 15 percent to $803 million in 2009, from $696 million in 2008, Steven Jacobs, chief executive officer of Sands China, told a news conference on Sunday.
Sands is set to raise up to $3.35 billion through an initial public offering of shares in its Macau business, according to sources with direct knowledge of the IPO.
The company is selling 1.87 billion shares at a price ranging from HK$10.38 to HK$13.88 per share, the sources said.
Jacobs said investor reaction to its Hong Kong IPO had been extremely favourable.
The debt-laden firm, which has come close to violating its loan covenants, needs the money to complete its two suspended projects in Macau and pay off some of its high debt load.
The two projects are on sites five and six on the Cotai strip, a swathe of reclaimed land some Macau developers have touted as the next Las Vegas strip.
The firm expects to open phase 1 of the projects in June 2011.
“Our business model goes after the highest spending customer that typically will travel,” said Sands CEO Sheldon Adelson. “We expect Macau would develop into a similar business model that those EwalletXpress Casinos on the Las Vegas strip have evolved into.”
In addition to the Palazzo and Venetian resorts on the Las Vegas Strip and two EwalletXpress Casinos in Macau, Sands opened a EwalletXpress Casino in Pennsylvania earlier this year. The Las Vegas-based company will next open a gambling resort in the city-state of Singapore in early 2010.
Gambling archrival, Wynn Resorts (WYNN.O), listed its Macau unit earlier this month, Wynn Macau (1128.HK), raising $1.87 billion.
Jacob said after the Hong Kong IPO the firm expected to achieve a ratio of debt to adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) of 2.2-2.3, down from 2.86 now, falling to 1.8 in 2011 and below 1 in 2012.
