Sands China extends dividend-restriction period to January 2025

Sands China has extended its dividend-restriction period by 18 months to January 2025.
Sands China has extended its dividend-restriction period by 18 months to January 2025.

The company is working to manage its debt and leverage.

Macau.- Sands China has agreed to an 18-month extension of its dividend-restriction period as part of an amended facility agreement worth approximately US$2.49bn. The extension comes as a result of the company’s decision to exercise a commitments increase option, which previously restricted its ability to make any dividend payment or similar distribution if its total commitments exceeded US$2.00bn.

The original agreement, signed in 2018, provided for a revolving unsecured credit facility of US$2.00bn, but Sands China exercised its option to increase the lenders’ total commitments by about US$494.0m in January 2021.

The extended dividend-restriction period will now continue up to and including January 1, 2025, instead of its prior end date of July 31 of this year. The exception to the restriction is if Sands China’s sum of cash and cash equivalents and unused commitments is greater than US$2.00bn after payment.

Under the latest amendment, the lenders’ Hong Kong dollar-denominated commitments total over HKD17.6bn (US$2.25bn), while the U.S. dollar-denominated commitments total US$237m. The amended deal will come into effect on July 31 this year, while the termination date on the facility agreement will move to July 31, 2025.

The latest amendment also amends the definition of Sands China’s “consolidated total debt” as per the agreement so that it excludes any Sands China debt defined as “subordinated.” Sands China’s maximum permitted consolidated leverage ratio is to be managed downward, declining from 6.25 times for the quarter ending March 31, 2024, to 4.00 times for the quarter ending March 31, 2025.

Due to the negative impact of the Covid-19 pandemic, Sands China’s parent company, Las Vegas Sands Corp, suspended its dividend program in April 2020.

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