Sands China said in a statement this week it “believes it will be able to support its continuing operations, complete the major construction projects that are underway, and respond to the current COVID-19 pandemic challenges.”
The US-Macau-Singapore gaming giant made the upbeat remarks in an “Inside Information Business Update” statement to the Hong Kong Stock Exchange on Monday.
The company is currently transforming its Cotai Sands Central property into “The Londoner Macao”.
In the statement, the company headed by Sheldon Adelson admitted that “the duration and intensity of this global health emergency and related disruptions are uncertain,” adding that “given the dynamic nature of these circumstances, the impact on Sands China Limited’s consolidated results of operations, cash flows and financial condition in 2020 will be material.”
The company also acknowledged that it “cannot reasonably estimate the impact at this time,” pointing out that “it is unknown when the COVID-19 pandemic will end, when or how quickly the current travel restrictions will be modified or cease to be necessary and the resulting impact on the willingness of Sands China Limited’s customers to spend on travel and entertainment.”
According to the statement, “in the current operating environment resulting from the impact of the COVID-19 pandemic, Sands China Limited estimates a monthly run-rate of operating costs of approximately US$110 million, development and maintenance capital expenditure of approximately US$65 million and approximately US$25 million for interest expense.”
The statement pointed out that the company recorded an operating loss of US$164 million and net loss of US$180 million in April, as compared to operating income of US$166 million and net income of US$148 million in the same period of last year. The statement also revealed that due to the COVID-19 pandemic the company’s financial performance in April reflects a daily adjusted property EBITDA of about US$3.5 million. According to the statement, the company’s net revenues totalled US$9 million in April, compared to US$700 million in the same month of last year, representing a decrease of 98.7 percent.
Sands China “believes it has a strong balance sheet and sufficient liquidity in place to fund its operations for 12 months in the current operating environment,” the statement said.
Proposed notes issue
Meanwhile, Sands China announced in a statement to the Hong Kong Stock Exchange yesterday that it proposes to issue senior notes to professional investors. The statement stressed that the completion of the proposed offering of the notes is subject to market conditions and investor interest.
According to the statement, Barclays Capital, BofA Securities and Goldman Sachs & Co. have been appointed as joint bookrunners.
“Pricing of the notes will be determined through a book-building exercise to be conducted by the joint bookrunners,” the statement said, adding that “the notes, if issued, will be repayable at maturity, unless earlier redeemed or repurchased pursuant to their terms.”
The statement underlined that the aggregate principal amount, terms and conditions of the notes have not be determined as at the date of the announcement.
According to the statement, if the notes are issued, Sands China intends to use the net proceeds from the notes for incremental liquidity and general corporate purposes.”
Moreover, “the company proposes to seek a listing of the notes on the [Hong Kong] Stock Exchange and has received an eligibility letter from the stock exchange for the listing of the notes.”
The statement defined the notes as “US$-denominated senior unsecured notes”.
