MGM MIRAGE completes $1B public stock offering

May 13, 2009 8:46 PM
Staff & Wire Reports |

Casino operator MGM MIRAGE said Thursday that it completed a $1 billion public stock offering, part of its plan to raise $2.5 billion in capital.

The struggling company, majority owned by billionaire Kirk Kerkorian, is trying to pay down some of its $14 billion in debt and improve its balance sheet. Kerkorian's Tracinda Corp. currently holds about 53.8 percent of MGM MIRAGE's stock.

Las Vegas-based MGM plans to use part of the offering's proceeds, as well as funds from a notes offering, to repay at least $750 million under its senior credit facility and buy back some of its debt and that of Mandalay Resort Group.

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The underwriters of the 143 million stock offering will have a 30-day option to buy up to about 21.5 million additional shares to cover any overallotments. MGM had approximately 276.6 million shares outstanding as of May 5, according to a filing with the Securities and Exchange Commission.

MGM also priced a private offering of $1.5 billion senior secured notes. The offering is set to close on Tuesday.

Aside from the two offerings, MGM announced Wednesday that it amended its credit agreement for a sixth time. The facility depends on MGM's ability to raise the necessary capital but allows the casino operator to avoid defaulting on its loans even if its auditors question whether it can continue to operate for the foreseeable future.

Shares of MGM MIRAGE fell 96 cents, or 10.9 percent, to $7.74 in trading just after the opening bell.

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