Project Receives Approval for Full Financing
Dubai World Dismisses Lawsuit Against MGM MIRAGE
LAS VEGAS and DUBAI, United Arab Emirates, April 29 /PRNewswire-FirstCall/
-- MGM MIRAGE (NYSE: MGM) and Dubai World through subsidiary Infinity World,
50/50 joint venture partners in the CityCenter project, today announced that
the companies have reached an agreement on a revised joint venture agreement
and also reached an agreement with CityCenter's lenders on a comprehensive
plan to fully fund the completion of CityCenter for its scheduled opening
later this year.
Under the plan, Dubai World and MGM MIRAGE will fund their remaining
equity contributions to CityCenter through letters of credit. In addition,
CityCenter's lenders will immediately fund the full $1.8 billion senior
secured credit facility. Additionally, Dubai World will dismiss its lawsuit
filed against MGM MIRAGE in Delaware Chancery Court on March 22, 2009, and
Dubai World and MGM MIRAGE will exchange mutual releases.
"We are pleased that MGM MIRAGE and Dubai World, with the strong support
of CityCenter's lenders, have agreed to a comprehensive plan for the financing
and completion of CityCenter," said Jim Murren, Chairman and CEO of MGM MIRAGE
and Chris O'Donnell, Dubai World's Director of the CityCenter joint venture.
"CityCenter is now fully funded and on track to open in December 2009," they
"CityCenter will be unlike anything anyone has seen in Las Vegas or
anywhere else. We are confident in the potential of CityCenter to contribute
significantly to our cash flow," said Mr. Murren. "CityCenter is a powerful
engine for growth and employment in Las Vegas and Nevada. With all funding in
place, we will focus, along with our partner, on planning for an exciting
opening in December and continuing to book rooms and conventions. We
appreciate greatly the strong support of our lenders, who share our vision as
to the importance of this project to the Las Vegas community and the entire
state of Nevada."
Mr O'Donnell said, "This agreement provides a stable financial framework
for one of the most exciting destination resort development projects ever to
be constructed. MGM MIRAGE is the industry's premier luxury hotel, resort and
casino developer and operator. We believe CityCenter has a bright future and
will benefit both the partners and the local economy, and we look forward to
working with MGM management to realize that potential."
Key terms of the various agreements include:
-- MGM MIRAGE will be responsible for completion costs to the extent net
condominium proceeds are less than $243 million and for completion
costs in excess of the current budget of $8.5 billion.
-- Dubai World has agreed to fully fund its original sponsor
contributions to CityCenter, including $135 million in payments
previously funded by MGM MIRAGE on Dubai World's behalf. Dubai World
is relieved of all completion guarantees.
-- Until the completion of CityCenter, MGM MIRAGE's obligations with
respect to additional construction costs, if any, will be supported by
the assets of Circus Circus Las Vegas and certain adjacent land
through a completion guarantee.
-- The CityCenter credit facility has been amended as part of the global
financing plan. Such amendments include:
-- The facility will mature on June 30, 2012.
-- The interest rate margin was increased by 2.00%, though such
amount is "pay in kind" through September 2010, with additional
periodic margin increases through the term of the facility.
-- Condominium proceeds of up to $250 million may be used to pay for
construction costs; 30% of net condominium proceeds in excess of
$250 million will be applied to reduce outstanding borrowings
under the credit facility, with the remaining 70% available as
distributable cash upon CityCenter satisfying certain performance
-- Certain financial covenants were modified to provide CityCenter
with greater flexibility during its first 18 months of operations.
Evercore Partners served as financial advisor to MGM MIRAGE and Moelis &
Company and Perella Weinberg Partners served as financial advisors to Dubai
World. Glaser, Weil, Fink, Jacobs, Howard & Shapiro, LLP and Morrison &
Foerster served as legal advisors to MGM MIRAGE and Paul, Hastings, Janofsky &
Walker LLP and Quinn Emanuel Urquhart, Oliver & Hedges served as legal
advisors to Dubai World.
Statements in this release which are not historical facts are "forward
looking" statements and "safe harbor statements" under the Private Securities
Litigation Reform Act of 1995 that involve risks and/or uncertainties,
including risks and/or uncertainties as described in the company's public
filings with the Securities and Exchange Commission.
About MGM MIRAGE
MGM MIRAGE (NYSE: MGM), one of the world's leading and most respected
companies with significant holdings in gaming, hospitality and entertainment,
owns and operates 16 properties located in Nevada, Mississippi and Michigan,
and has 50% investments in four other properties in Nevada, New Jersey,
Illinois and Macau. CityCenter, an unprecedented urban metropolis on the Las
Vegas Strip scheduled to open in late 2009, is a joint venture between MGM
MIRAGE and Infinity World Development Corp, a subsidiary of Dubai World. MGM
MIRAGE Hospitality has entered into management agreements for future casino
and non-casino resorts in the People's Republic of China, Abu Dhabi, U.A.E.
and Vietnam. MGM MIRAGE supports responsible gaming and has implemented the
American Gaming Association's Code of Conduct for Responsible Gaming at its
properties. MGM MIRAGE has received numerous awards and recognitions for its
industry-leading Diversity Initiative and its community philanthropy programs.
For more information about MGM MIRAGE, please visit the company's website at
About Dubai World
Dubai World is a leading global corporation focused on five strategic
growth areas: Transport & Logistics, Drydocks & Maritime, Urban Development,
Investment & Financial Services, and Energy & Natural Resources.
Its portfolio comprises some of the world's best known companies,
including DP World, Drydocks World & Dubai Maritime City, Economic Zones
World, Nakheel, Leisurecorp, and Istithmar World.
Dubai World's strategy is driven by a combination of pragmatic
acquisitions and prudent investments and its corporate philosophy is based on
strong fundamentals, best ethical practices and integrity.
MGM MIRAGE Contacts:
Investment Community News Media
DANIEL J. D'ARRIGO ALAN M. FELDMAN
Executive Vice President, Senior Vice President
Chief Financial Officer Public Affairs
(702) 693-8895 (702) 650-6947
Dubai World Contacts:
+1 310 592 5882
+971 (0) 50 6250890
SOURCE MGM MIRAGE; Dubai World
CONTACT: Investment Community, Daniel J. D'Arrigo, Executive Vice
President, Chief Financial Officer, +1-702-693-8895, or News Media, Alan M.
Feldman, Senior Vice President, Public Affairs, +1-702-650-6947, both for MGM
MIRAGE; or Dubai World Contacts, US, +1-310-592-5882, or Dubai,
Company News On-Call: http://www.prnewswire.com/comp/000725.html/
Web Site: http://www.mgmmirage.com