The news that Las Vegas Sands is to halt construction on its Macau projects is hardly surprising following the company’s declaration to the US Securities and Exchange Commission that it was in danger of defaulting on debt and breaching debt ration covenants. LVS has decided to focus on other developments in Singapore and Pennsylvania and is to freeze construction on two sites on the Cotai Strip.

William P. Weidner, president and COO, confirmed that growth at the company’s Macau operations continued but said, “Despite that strong performance, given the current conditions in the global credit environment, we have elected to significantly slow the pace of our development activities on the Cotai Strip, including a suspension of our development on sites five and six of the Cotai Strip, as we focus our current efforts on maximizing our cash flow and our returns on invested capital from our existing properties in Macao.”

He added, "We will focus our development activities and available capital principally on the timely completion of both Marina Bay Sands, in Singapore, and Sands Bethlehem, in Bethlehem, Pennsylvania. At an appropriate time in the future, to the extent capital becomes available on acceptable terms, we plan to resume the development of sites five and six on the Cotai Strip.” LVS says that the Marina Bay Sands development in Singapore is expected to continue on target for a late 2009 opening, and not be significantly impacted by the current capital market conditions.

However, Bloomberg reports that the Singapore government may form a venture with CapitaLand Ltd, Asia’s largest developer and LVS partner in Singapore, to take over the Marina Bay Sands if LVS fails to avoid loan defaults. LVS has declined to comment but CapitaLand said in a statement, ``Potential opportunities will be carefully explored and evaluated, ensuring that an acquisition is made only at the right time, right price and when target returns are met given the current difficult economic operating environment.'' (E-11.11.08)

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