MGM Resorts International contemplating further casino sales

The boss for American casino operator, MGM Resorts International, has reportedly announced that his firm is working to implement an ‘asset-light’ strategy that could soon see it offload its giant, MGM Grand Las Vegas venue.

According to a report from the Las Vegas Review-Journal newspaper, Jim Murren serves as Chairman and Chief Executive Officer for the Las Vegas-headquartered operator and made the revelation during a Wednesday conference call with investors to discuss the firm’s third-quarter financial results.

Earlier outline:

MGM Resorts International inked a 30-year lease-back deal early last month that saw it sell its 3,900-room Bellagio Las Vegas property to private equity firm Blackstone Group LP for approximately $4.2 billion while this was prefaced by a similar $825 million arrangement for its nearby Circus Circus Las Vegas venue. Murren reportedly explained that these transactions will now be used as blueprints for future such arrangements that may encompass its MGM Grand Las Vegas, Aria Resort and Casino Las Vegas and Vdara Hotel and Spa operations in addition to its MGM Springfield concern and affiliated MGM Growth Properties real estate investment trust.

Murren told investors…

“These transactions were key steps but by no means the end of our journey. The Bellagio Las Vegas real estate transaction represents more to us than a smart financial deal. It provides a likely blueprint for the future. In fact, a process to monetize the real estate related to the MGM Grand Las Vegas is now well underway and we anticipate sharing more of that with you before the end of this year.”

International expansion:

The casino boss reportedly told investors for New York-listed MGM that the majority of proceeds from any such upcoming sales would be utilized to support the operator’s envisioned nationwide rollout of sportsbetting as well as its plan to bring an integrated casino resort to the Japanese city of Osaka.

Murren continued…

“For MGM Resorts International, asset-light means separating the ownership of capital-intensive [and] lower return assets and recycling that capital into high return on investment opportunities.”

Financial harm:

However, the newspaper reported that the recent Circus Circus Las Vegas sale had put a significant dent in MGM Resorts International’s third-quarter earnings courtesy of a one-off non-cash impairment charge worth about $219 million. This had purportedly led to the firm recording a $37.1 million deficit for the three-month period despite up a comparable 9% increase in net revenues to slightly over $3.3 billion.

Nevertheless, Murren described these figures as ‘solid’ and in line with earlier projections and predicted that the firm would experience a bright fourth quarter thanks to a healthy convention calendar in Las Vegas and the debut of a host of new entertainment offerings.