The biggest winners from Las Vegas Sands Corp's proposed spin-off of its Macau business look to be the company's creditors in the United States and Macau, data from the final listing prospectus released yesterday by Sands China shows.
As much as HK$14.68 billion or 57 per cent of the total amount to be raised in Hong Kong will flow back to the New York-listed parent company if the deal is priced at the top of the range. About HK$2.33 billion or 9 per cent of the gross proceeds will be used to pay down Macau-specific loans, according to the listing document.
'This [initial public offering] delevers and derisks our balance sheet, both for Sands China and importantly for the parent,' Sands China chief executive Steve Jacobs said yesterday at a press briefing.
Much of the proceeds will pay a hefty portion of Las Vegas Sands' US$11.76 billion of debt. And at least HK$3.88 billion from the Hong Kong share sale - 15 per cent of the deal if priced at the high end - will be used to resume work on the massive but half-finished 6,400-room Cotai casino-hotel project across the street from the 3,000-room Venetian Macao.
Las Vegas Sands is trying to raise HK$19.41 billion to HK$25.96 billion selling a roughly 23.5 per cent stake in Sands China, which owns and operates the Venetian, Sands and Four Seasons casino-hotels in Macau.
Las Vegas Sands is selling 600 million existing shares and 1.27 billion new shares in Sands China to be priced at HK$10.38 to HK$13.88 each. Ninety per cent of the deal is earmarked for institutions and the rest for Hong Kong retail investors. Pricing is expected to be set on Saturday and the first day of trading is scheduled for November 30.
If priced at the high end, the sale would be Hong Kong's second-biggest listing this year following China Minsheng Banking Corp's planned share sale.