MGM-Pansy Ho venture is technically insolvent

MGM Grand Paradise, the financially troubled US$1.25 billion Macau joint venture between Pansy Ho Chiu-king and MGM Mirage, is technically insolvent.

The private Macau casino developer, controlled by the daughter of Stanley Ho Hung-sun and the Las Vegas gaming giant, booked a net loss of 251.06 million patacas last year, according to an annual report compiled under Macau accounting principles.

The company's 10.274 billion patacas in liabilities exceeded its total assets of 10.271 billion patacas, leaving it in negative equity by a margin of 2.65 million patacas at the end of last year.

'This is obviously not healthy and is not good at all,' said one gaming analyst. 'I don't think the banks would want to push them towards bankruptcy because they don't want to own the MGM Grand Macau.'

The financial crisis has dealt a heavy blow to some heavily leveraged Macau developers, which are struggling under large debt burdens amid falling gaming revenues.

Venetian Macao developer Las Vegas Sands Corp said in November it was at risk of defaulting on US$3.3 billion in Macau-specific debt, but it later sold new shares to raise a US$2.1 billion cash cushion.

Macau Fisherman's Wharf, a HK$2 billion theme park jointly developed by Mr Ho and David Chow Kam-fai, is in the middle of a heavily discounted buyout of foreign funds including TPG and Och Ziff, which invested US$400 million in its debt securities several years ago.