MGM Resorts International, the largest casino operator in Las Vegas, is looking to sell portions of its property in the CityCenter complex on the Las Vegas Strip to get out of its "immense" debt.
Potential buyers have already started approaching the management with proposals to purchase one of its luxury malls - the Crystals worth $8.5 billion.
The CityCenter complex is a luxury commercial hub jointly owned by MGM Resorts International and Dubai based real estate firm, Dubai World. The complex has the largest casino and is studded with luxury hotels and malls.
Since its completion in 2009, the authorities have been trying to generate enough cash flow from the properties but in vain. The project was refinanced in 2010. The cash was used to pay debts and extend loan due dates, reports Arabian Business.
In 2012, the CityCenter operators owed more than $12 billion in debts. In December that year, they announced new financing worth $5 billion, which is currently covering the loan interest costs, reports CNBC.
MGM Resorts International chairman, Jim Murren, said in a telephonic interview to Reuters that selling portions of CityCenter would increase the value of the project to its shareholders as well. He asserted that selling Crystal Mall was the most lucrative option.
"CityCenter is always looking for ways to improve the value for its shareholders and I think the most attractive candidate down the road would be Crystals. We've gotten a bunch of inquiries over the last six months. Crystals could raise a tremendous amount of money for its owners." Murren said in the interview.
The Crystals Mall recorded an annual net cash flow of $32 million and revenue of around $54 million in 2012. In the fourth quarter of the year, the mall recorded a 17 percent hike in its earnings before interest, taxes, depreciation and amortization (EBITDA). The mall has high end luxury retail stores like Jimmy Choo, Gucci, and Hermes etc.
The Las Vegas Strip was hit hard by the recession. Business has been low over the last few years in the region. MGM also recently announced a net loss that went up to $1.2 billion from $113.7 million in 2011.
However, as the global economy improves slowly, MGM plans to expand into the gambling region of Macau, China. Its existing resorts and hotels in the country posted a 1.7 percent profit rise in the fourth quarter of 2012.
