Dubai in new mega Las Vegas resort venture with MGM and Kerzner
Istithmar Hotels, a unit of Istithmar, the Dubai owned investment firm, has entered into an agreement with MGM Mirage and Kerzner International Holdings to develop a multi-billion dollar integrated resort property on the Las Vegas Strip.
Istithmar will take up a 25% stake in the Mega project, MGM will own 50% and Kerzner 25%.
This will mark Dubai's latest foray into Las Vegas. Last month, Dubai World said it planned to invest up to US$5.2 billion in MGM Mirage by buying a 9.5% stake and half of the company's CityCenter development in Las Vegas.
Under this latest agreement with MGM Mirage and Kerzner International, Dubai World unit Istithmar will provide cash equity for the new project, MGM Mirage said on Tuesday. Kerzner will also provide cash equity and MGM Mirage will provide the land for the resort.
When plans for the project were originally announced in June, MGM and Kerzner were to be 50/50 partners.
"The Las Vegas market is one which we firmly believe will continue to expand," Sultan Ahmed Bin Sulayem, Dubai World's Chairman, said in a release.
The new resort will be designed for approximately 40 of the 78 acres of land owned by MGM Mirage, located on the corner of Las Vegas Boulevard and Sahara Avenue. Kerzner will lead the planning and conceptualisation of this project. Construction will start in the first half of 2009 with a targeted 2012 opening, according to information from Kerzner.
The land is valued at US$20 million per acre, putting MGM's contribution at US$800 million.
The joint venture, CityCenter Holdings, will be owned equally by MGM Mirage and Infinity World Development, a wholly-owned subsidiary of Dubai World. CityCenter will be a mixed-use luxury residential, resort and retail complex. It is currently being developed by MGM Mirage on the Las Vegas Strip.
In addition to investing in the joint venture, Dubai World through Infinity World Investments, will purchase up to 28.4 million shares of MGM Mirage representing approximately a 9.5% equity stake for a combined investment of approximately US$2.4 billion.
MGM Mirage owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. In addition, the company has major new developments under construction in Nevada, Michigan and Macau.
Kerzner International Holdings, through its subsidiaries, is an international developer and operator of destination resorts, casinos and luxury hotels.
Istithmar Hotels is a 100% subsidiary of Istithmar, Dubai World's investment company. Istithmar's real estate division brings together Istithmar's interests in commercial property, hotels and resorts, the leisure sector and in retail. Dubai World is wholly owned by the Government of Dubai.
Dubai World launched a road show on Tuesday in Dubai for a one-year US$2.7 billion loan. The facility will be used for general corporate activities, Sharaf said, declining to be more specific.
Syndication closes on 1 October, with the roadshow now heading to Hong Kong.
Dubai World's loan is priced at 85 basis points over the London interbank offered rate for the first six months, and 110 basis points for the rest of the term. Source
Istithmar will take up a 25% stake in the Mega project, MGM will own 50% and Kerzner 25%.
This will mark Dubai's latest foray into Las Vegas. Last month, Dubai World said it planned to invest up to US$5.2 billion in MGM Mirage by buying a 9.5% stake and half of the company's CityCenter development in Las Vegas.
Under this latest agreement with MGM Mirage and Kerzner International, Dubai World unit Istithmar will provide cash equity for the new project, MGM Mirage said on Tuesday. Kerzner will also provide cash equity and MGM Mirage will provide the land for the resort.
When plans for the project were originally announced in June, MGM and Kerzner were to be 50/50 partners.
"The Las Vegas market is one which we firmly believe will continue to expand," Sultan Ahmed Bin Sulayem, Dubai World's Chairman, said in a release.
The new resort will be designed for approximately 40 of the 78 acres of land owned by MGM Mirage, located on the corner of Las Vegas Boulevard and Sahara Avenue. Kerzner will lead the planning and conceptualisation of this project. Construction will start in the first half of 2009 with a targeted 2012 opening, according to information from Kerzner.
The land is valued at US$20 million per acre, putting MGM's contribution at US$800 million.
The joint venture, CityCenter Holdings, will be owned equally by MGM Mirage and Infinity World Development, a wholly-owned subsidiary of Dubai World. CityCenter will be a mixed-use luxury residential, resort and retail complex. It is currently being developed by MGM Mirage on the Las Vegas Strip.
In addition to investing in the joint venture, Dubai World through Infinity World Investments, will purchase up to 28.4 million shares of MGM Mirage representing approximately a 9.5% equity stake for a combined investment of approximately US$2.4 billion.
MGM Mirage owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. In addition, the company has major new developments under construction in Nevada, Michigan and Macau.
Kerzner International Holdings, through its subsidiaries, is an international developer and operator of destination resorts, casinos and luxury hotels.
Istithmar Hotels is a 100% subsidiary of Istithmar, Dubai World's investment company. Istithmar's real estate division brings together Istithmar's interests in commercial property, hotels and resorts, the leisure sector and in retail. Dubai World is wholly owned by the Government of Dubai.
Dubai World launched a road show on Tuesday in Dubai for a one-year US$2.7 billion loan. The facility will be used for general corporate activities, Sharaf said, declining to be more specific.
Syndication closes on 1 October, with the roadshow now heading to Hong Kong.
Dubai World's loan is priced at 85 basis points over the London interbank offered rate for the first six months, and 110 basis points for the rest of the term. Source
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