MGM Mirage struggles to keep Vegas Strip project afloat
18 Apr 2009
New York: Casino company MGM Mirage Inc said Friday it had paid $70 million toward construction of the massive CityCenter project on the Las Vegas Strip. The payment also covers $35 million owed by its equal partner, Dubai World over and above its own half of the payment.
The $8.7 billion project includes hotels, a casino, condos and retail space on 67 acres. It is scheduled to begin operations later this year. Early this week MGM Mirage reached an agreement with its lenders on Monday that allowed the casino operator to cover Dubai World's 
share.
An additional payment of $200 million is due in another two weeks.
MGM Mirage is struggling with a debt load of more than $13 billion and also faces a sharp decline in consumer interest in gambling. It lost $855 million in 2008.
A Wall Street Journal report said Thursday that activist investor Carl Icahn wants the casino operator to file for bankruptcy protection. Without naming sources, the paper said Icahn and private equity fund Oaktree Capital Management are pushing the company to restructure its debt as soon as possible. The report also said Icahn and Oaktree have recently bought hundreds of millions of dollars in MGM Mirage debt.
However, any restructuring agreement must have the consent of billionaire Kirk Kerkorian, MGM Mirage's majority shareholder.
Without commenting on the report MGM Mirage spokesman Gordon Absher said the company was having ''productive conversations'' with its partners and lenders and remains ''enthusiastic'' about the project.
Dubai World sued MGM Mirage last month, saying the casino company's statements about its own financial health put the CityCenter project at risk. It was particularly concerned, it said, about comments in MGM Mirage's annual report which warned the company could default on its debt and be forced to seek bankruptcy court protection.