Macau casino operator Sands China Ltd does not see a “likely scenario at this stage” for buyout of the minority shareholders’ interest in the company and any delisting from the Hong Kong Stock Exchange.
That is according to a Friday note from Seaport Research Partners, citing conversations with the management of Sands China’s parent, Las Vegas Sands Corp, at the 2024 Seaport Annual Summer Conference.
“There is not a likely scenario at this stage of a full buyout of the Sands China minority, and delisting of Sands China Ltd,” wrote analyst Vitaly Umansky in the memo.
He added citing the conversations: “A listing in Hong Kong continues to show Sands’ commitment in China.”
Sands China would “most likely see dividend restart in 2025 with scale of dividend dependent on performance post-Londoner completion,” added Mr Umansky, referring latterly to revamp work to hotel space and gaming space at the Macau unit’s Londoner Macao casino resort in the city’s Cotai district.
“Las Vegas Sands will prioritise share buybacks – especially at current valuation – over dividend increases,” wrote the analyst.
“Further, Las Vegas Sands would likely look to buy shares in Sands China to increase its stake from approximately 71 percent today to 75 percent-plus,” he added.
Mr Umansky added, citing the conversations, that there were “no immediate needs or plans to pay back the US$1-billion intercompany note from Sands China to Las Vegas Sands”.
He further stated: “For Las Vegas Sands [and] Sands China, [the] objective on capital structure would be to maintain investment-grade debt rating to allow for future flexibility in financing any projects.”
In terms of capital structure for the parent, Seaport observed that Las Vegas Sands holds a US$1.2 billion seller’s note “from its sale of the Las Vegas assets,’ and which matures in 2028. The parent completed disposal of its Las Vegas, Nevada, resorts in the United States in early 2022.
“The note will switch from payment-in-kind to cash pay in 2025 – at 4.25 percent coupon. Las Vegas Sands may look to sell the note before maturity if cash [is] needed for development,” added Mr Umansky.
Seaport’s update also suggested regarding the Londoner, that the casino on the south side of the property – formerly known as Pacifica – might open “slightly earlier” than a December timeline mentioned by Las Vegas Sands Corp’s chairman and chief executive Robert Goldstein on the parent’s second-quarter earnings call in July.
Mr Umansky further observed, based on management commentary, that some revamped hotel space at the Londoner Macao would see one tower “open partly” in December, and another “by May 2025”.
He added that the Cotai Arena at Sands China’s Venetian Macao resort on Cotai would “reopen in December with full programming up and running in first quarter 2025”.
