Dubai World's plan for Las Vegas project survival
Partners in the CityCenter project must commit to US $3bn funding
Dubai World has reportedly offered a plan to save the struggling US $8.8 billion Las Vegas CityCenter project that is being developed by a joint-venture between its subsidiary Infinity World and US-based MGM Mirage.
Dubai World, MGM Mirage and their lenders must commit to the $3 billion funding required to save the project, according to reports in the Wall Street Journal.
Though details of the deal are not available, the newspaper said a full funding commitment would likely mean banks would forgo an agreement to release a $1.8 billion loan only after MGM Mirage and Infinity World had put in more cash of their own.
If MGM Mirage is forced to declare bankruptcy, such an arrangement would still mean the survival of the project was assured it reported.
MGM Mirage is struggling under the twin burdens of a $13.5 billion debt, combined with its ongoing payments for the CityCenter project.
The gambling giant has been hit hard by lack of access to credit alongside unforeseeably weak consumer demand in the US.
Last month the group secured $200 million of funding from one of its lenders to allow the CityCenter project to continue for a four-week period.
Dubai World said in a statement at the time that it was “an acceptable, albeit temporary, solution to the liquidity issues that MGM Mirage is facing.”
Dubai World has not responded in the meantime to requests from Construction Week for information regarding its plans should MGM Mirage fail to stump up any further payments.
The latest development in the saga could see the project – the second-most valuable single construction project in the world behind the $8.85 billion Dubai Pearl – through to completion by the end of this year.