MGM Floats Property Sales

MGM Mirage is weighing options that could include selling off some properties to help its balance sheet following the casino operator’s recent posting of a $1.15 billion loss in the fourth quarter.

In a conference call with investors March 17, MGM Mirage chairman James Murren said the company has seen a great amount of interest in its hotels and casinos from potential buyers in recent months, but declined to state which properties could go on the block.

MGM sold its Treasure Island Hotel-Casino in Las Vegas to billionaire Phil Ruffin in December for $775 million, but it appears that sale wasn’t enough to keep the company out of the red.

Company executives said during the call that declining market values, room rates and cash flow for Mandalay Resort Group, which MGM acquired in 2005, led MGM to write down that investment by $1.17 billion, or a loss of $4.15 per share. MGM stock was up $2.85 per share in the previous year.

Revenue fell $1.6 billion from $1.93 billion in the prior year period. Debt totaled $13.47 billion as of Dec. 31.

While MGM repaid $300 million to lenders during the quarter to free up financial obligations through May 15, officials expressed worries that the company could default on its debts this year as it scrambles to finish the 67-acre CityCenter development in Las Vegas.

MGM still needs more than $1 billion to complete the $8.6 billion project.

Following the investor call, MGM Mirage shares were down 8 cents to close at $3.03.