MGM MIRAGE MAY DEFAULT ON DEBT

Las Vegas gambling giant, MGM Mirage, reported this week that it may default on its debt obligations. This announcement came amid their development drive for the $8,6 billion City Centre complex in Vegas. Owned by billionaire Kirk Kerkorian, the MGM Mirage has reported that unless the economy receives a jump start and gambling revenues increase, they may have to default on their senior credit facility.

The company has delayed the release of their annual report until the 17th March 2009, asking for leniency based on the fact that they are still finalizing their financial arrangements following the decision last week to use $842 million of their revolving credit agreement to cover general operating expenses.

The company has amassed over $13, 29 billion in debt.
The company has recently been shedding properties in a bid to shore up their holdings. The properties sold include the Treasure Island Casino in Vegas and land in Nevada, Atlantic City and New Jersey. Other gaming operators such as Las Vegas Sands Corp have also been grilled by their auditors since November 2008.

The City Centre project requires a further $1, 2 billion in investment. Sprawled over 67 acres on the Vegas strip, the precinct features hotels, condos and shops. The company’s overall profit for the first three quarters of 2008 declined an astonishing 59% from the 2009 figures.

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