MGM Mirage's $200 Million CityCenter Payment

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Thought it odd to see a press release on MGM Mirage making a $200 million CityCenter payment? Well, because of recent rumors of bankruptcy, MGM Mirage had to cough up the dough or its $8 billion project would be deemed insolvent by investors and creditors alike. The press release said it made the payment even though half of it should have been made by Dubai World, its partner in the project.

Dubai World is currently suing MGM Mirage to get out of its partnership, so it’s unlikely MGM will get that money anytime soon. MGM Mirage also has to make the project look good for the lawsuit or risk losing its lucrative partnership.

“MGM Mirage believes that CityCenter is of vital importance to Las Vegas and the state of Nevada,” Jim Murren, the company’s chief executive said in the release. “We are doing our utmost to see that this project continues, keeping thousands of Nevadans employed.”

Analysts said the news means the project is still underway and although it won’t raise its corporate credit rating from “C,” it means the company proves it can pay its bills. And that’s not always a foregone conclusion when said company is $14 billion in debt.

So, the press release did accomplish a few goals: raising consumer confidence, showing the CityCenter project isn’t doomed and stemming bankruptcy rumors. Now, if only it could stay that way . . .

Tags: Payment, MGM Mirage, Dubai World, Litigation, Business Structures, Personal Finance, Operational Accounting, Business Operations, Finance, Barbara E. Hernandez

Bay Area resident and award-winning business journalist Barbara E. Hernandez has covered tourism, real estate and personal finance. Her clients include the New York Times, Los Angeles Times, San Francisco Chronicle and Washington Post.

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