MGM raises $700m through MGP deal
MGM Resorts made the sale as the Covid-19 pandemic continues to impact the gaming industry.
US.- MGM Resorts has raised $700m from its affiliated real estate investment trust, MGM Growth Properties (MGP), which exchanged the capital for 23.5m operating partnership units in MGM Resorts.
MGM carried out the deal in a bid to raise money “for general corporate purposes” as the Covid-19 pandemic continues to impact business.
It’s the second between MGM and MGP, which allows the latter to redeem up to $1.4bn of the equity it owes.
Once the transaction is finalised, MGM Resorts will have around 149m units, which equates to 53 per cent economic ownership in MGP.
MGM Resorts CEO and president, Bill Hornbuckle, said: “Today’s announcement reflects our continued focus on enhancing our balance sheet to strengthen our financial flexibility.
“As the pandemic continues to impact operations at our properties across the US, we believe the opportunistic exercise of our redemption right as well as our recent senior notes offering allow us to continue pursuing our strategic goals while navigating the crisis.”
The Las Vegas-based casino operator reported an operating loss of $495m for the third quarter, a $238m decline from the same period last year.
CEO of MGM Growth Properties, James Stewart, said: “Our recent capital raise will allow us to fully fund this final redemption under the waiver agreement with cash on hand while still maintaining a balance sheet positioned for future growth.”
