November 14, 2008 3:54 PM

Paul Weiss Advising Las Vegas Sands' Scramble for Cash

Posted by Zach Lowe

Billionaire Sheldon Adelson's venture into the gambling hotbed of Macau, China, hasn't turned out exactly as planned. First, a trial court awarded $43.8 million to a Hong Kong businessman who claimed Adelson owed him money because he helped Adelson's company, Las Vegas Sands, win a gambling license in China.

Now the company has halted construction on a $15 billion expansion of its project in Macau and laid off 11,000 construction workers and other staff, Reuters reports. The company needs money, and they've turned to Paul, Weiss, Rifkind, Wharton & Garrison to raise about $2 billion from banks and stock offerings.

A Paul, Weiss spokeswoman confirmed that the firm is representing Sands. The firm advised the company during its initial public offering in 2004, according to this article about law firms expanding into Las Vegas from a 2005 issue of The American Lawyer.

Paul, Weiss did not immediately provide a list of partners working on the financing, which will come mostly from a syndicate of banks the company is negotiating with, according to Reuters and a statement from Sands. The company is also offering about 180 million shares of its stock for $5.50 each; Adelson himself will buy a chunk of them.

The global economic crisis has battered the gambling industry as more people hoard disposable income they might otherwise risk at the blackjack table or in slot machines, Reuters and the Associated Press say. Share prices for Las Vegas Sands stand at about $6 now, down from a high of $122 last December.

The company has already spent about $1.2 billion on its effort to create a $15 billion Vegas-style strip in Macau, the AP says. It is also in danger of defaulting on billions in U.S. loans, according to reports.

 

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