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The quicksand of Sands Print E-mail
Saturday, 08 November 2008

Singapore Democrats

Just weeks after the Singapore authorities gave an upbeat report that the Integrated Resort Casino will create thousands of jobs, developer Las Vegas Sands (or as some wit cracked, Lost Wages Sands) reported that it is haemorrhaging cash and will likely file for bankruptcy.

Auditor PricewaterhouseCoopers has raised doubts that Sands is financially viable. The company's share price plunged 32.7% to US$7.85 last Friday and its credit default spread is at 1804bp which indicates high risk.

The auditor also says that the gaming conglomerate will not be in compliance with maximum leverage ratio convenant for 4Q08. Filing for Chapter 11 bankruptcy protection is a distinct possibility.

Provided that IR Singapore can be shielded from its Las Vegas parent company and sold to another investor, it looks likely that the project will face a long and financially crippling delay. Negotiations for another backer will take many months and this has to take place before construction can recommence.

Given the current credit situation, where will such a buyer get additional funding bearing in mind that many mega-funded projects in the world have been put on hold since the tailend of 2007?

To make matters worse revenue for gaming resorts all over the world have declined, which is all a big worry for Singapore banks DBS, OCBC and UOB. They had led in extending a S$5.4b credit facility to Marina Bay Sands which makes them significantly exposed to the turmoil that is riling the parent company.

The total exposure of the three banks to the project is about $1.3b. It is understood that that about 50% of the S$5.4b has already been drawn down.

If Las Vegas Sands goes under, there are two possible scenarios: One, the consortium of banks gets another developer to take over the project. This looks improbable given that most international casino operators are already highly leveraged and unlikely to have the appetite to further expand into Singapore.

With the US economy tanking, Las Vegas gaming corporations are looking more to consolidate than expand their operations. And where they do venture overseas their main target is Macau, not Singapore.

Two, the Government throws open its doors to all and sundry in a desperate attempt to increase revenue. The entry levy for gamblers, currently pegged at $100/day or $2,000/year may be lowered or even done away.

The gaming area presently limited to less than 3 percent of the total floor area of the resort may be also increased. These adjustments will be aimed at making the project more appealing to potential investors.

Of course such a move will be a serious breach of promise that the Government made to Singaporeans when it pushed for the IR development. The social impact of the relaxed rules will be yet another cost to the Singaporean society.

A potential investor is, of course, Temasek or one of its subsidiary companies which are fiscally muscular enough to rescue the IR project.

But this is where in all gets a little, pardon the pun, dicey. The ruling party's image will be severely dented if the casino plans fail. Politically, there is much at stake for the Government. There will be great temptation for the Government to throw money - taxpayers' money - at the project to save face.

This is a perennial problem in a system where the nexus between corporations and politicians are as tight and opaque as it is in Singapore.

And there could be a double whammy here for Singaporeans. Even if the IR is successful in finding another investor, Las Vegas Sands will continue to be disadvantaged by the current global economic crisis and it will be stuck with the US$5b credit facility money it now owes. Mind you, the new investor is not obligated to ensure the banks recover their money.

Frighteningly, Singapore banks do not have to disclose precise exposures to individual customers due to banking secrecy laws here. The negative turn of events at Sands will no doubt hit share prices for all the three Singapore banks. Singaporeans will be left to carry the baby yet again.

 

 

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Comments (29)
  • AnnA - To : All PAP Supporters
    High probability that "There will be great temptation for the Government to throw money - taxpayers' money - at the project to save face."

    Continue to support your dearest PAP to your own downfall. Good luck !!
  • Anonymous
    Decisions made without consultation of the people are flawed. Thinking that they were smarter than anyone else, the project went through. Suddently, MARINA BAY was full of banglas and chinamen. Then, business schools were promoting tourism, casino management courses. And people taking them up with the IR in mind.

    Now, if this project fails to bring in the result, not only LKY but i say the whole PAP can go and prepare their graveyard for the next elections.

    The IR was opposed by many Singaporeans (well I don't have the numbers but it was many) but yet this elitist people who have lost touch with the ground insisted on the project.

    Starting with their "wayang" parliamentary debate, forums and all the nonsense they could find and TA DA! The IR project went through.

    Well, the only thing we hope now is that we have a better future to look up to. Because a lot of Singaporeans have betted on the IR and have a lot of expectations.
  • G Chen
    Eventually I believe Singaporeans will be made to pay for any shortfall in the IR project and the losses made by town councils, Temasek and GIC..now I know why there used to be a milk advert which said that New Zealand has as many cows as Singapore's population..guess Singaporeans are really treated like cows.
  • Anonymous
    you got it right, gaming tables will be increased from 600 up to 1,000
    http://www.bloomberg.com/apps/news?pid=20601087&sid=av1r7jv1sFT0&refer=home

    I'm really wondering about this whole asian values facade. my all-time favourite is no playboy magazines, but we allow prostitutes, yeah, thats the way to go. I'd sure like a minister to explain this one, or anyone for that matter.
  • David
    How about making IR the suicide platform for the gahmen when IR fails ? They can bungee jump without protection.
  • Short Sighted Leaders - Million Dollar Short Sighted Leaders
    How can they be SO IGNORANT.

    Just two weeks ago, they fooled thousands of citizens giving them false hope. Made and any my neighbours wasted our money and time to queue for jobs in Sands....

    Two weeks later, the potential Employer is facing bankruptcy...

    What type of leaders...
  • Anonymous - Poor Singaporeans made yet poorer - again
    [u]Singaporeans will be left to carry the baby yet again.[/u]

    Carry the BABY? More like the BOMB - the A-BOMB, that is.
  • 姓「灾」 名「乐祸」 - Tough-luck Singaporeans
    [quote]Continue to support your dearest PAP to your own downfall. Good luck !![/quote]

    Well, the time bomb had already started ticking when that Hakka with an agenda to bankrupt this British crown jewel came into office in 1959.

    Or was it 1923 - when the Devil-reincarnate came into being at all!
  • Insider
    [quote]From wat i understand, OCBC has higher interest also though not by much.[/quote]

    You ought to perhaps also understand that OCBC is the banking arm of Lee Rubber Company
    - whose founder was the true Singapore son Lee Kong Chian (Heavens bless his soul; he's a true Hokkien, from Nan'an, so no relations with Hakkas)
    and whose descendant-beneficiaries including Lee Seng Gee, Lee Seng Hee of the Lee branch & the Tan (Lark Sye's)branch's Tony Tan (that Hokkien traitor) who have also since inter-married with the Hakka Lees.

    And being the scion of the Tan-Lee extensded family, OCBC will in time to come be ABSORBED into the GIC-Temasek-PAP supermegaconglomerate.
  • jacys - Most Singaporeans support the PAP's IR plans
    Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.
  • Ximen - Jacys - Have you forgotten almost half of Singapor
    You mean WP is a lap dog of PAP? Haha. There is no mad dog here, i mean SPCA would have gotten them. I am totally against CAsnio project here in Singapore. I am glad that this project now going to hit the rocks but dismayed that Sinkies are going to pay more for the gov lack of foresight.

    SDP so far has been the wise opp party, if the ruling gahmen heed the people who oppose this plan, there wont be a problem now at all. I am sure LVS will default and close or sold the project in singapore away. Who will lose out in the end?
  • About Time - The Downfall, Domino Style
    It is obvious that God is giving retribution to the tyrants. And believe me, this is the lightest sentence God gave.

    ***************************************

    jacys,

    When you work is equal to you act.
    Work = Act. Workers = People's Action. So Workers' Party = People's Action Party lah.

    LoL
  • k z - re: Most Singaporeans support the PAP's IR plans
    [quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]

    umm if it wasnt opposed then why did the govt need a feedback session and all that..
    and how many times before did lky say singapore is not a place for a casino.

    im not a religious person but i dont support the casino because there are other areas we can diversify into.
    casinos are for places where there was nothing else to go into like las vegas and macau. we are so much more better then that.
  • ah beng - re: Most Singaporeans support the PAP's IR plans
    [quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]So does WP has a plan?
  • Anonymous - re: Most Singaporeans support the PAP's IR plans
    [quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]

    Thank you for letting us all know the WP's perspective on this issue, and that you in fact stand united with the PAP.

    Now we have a few more reasons for why we SHOULD NOT VOTE FOR YOU.
  • G Chen - re: Most Singaporeans support the PAP's IR plans
    [quote=jacys]Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.[/quote]

    Few "religious rights"?? National Council of Churches, Roman Catholic Church in Singapore, Singapore Islamic Scholars and Religious Teachers Association etc are considered as "a few"? Even social group like AWARE considered establishment of a casino in Singapore a retrogressive move that puts at risk the well-being of many families in Singapore. Last but not least Worker Party Executive Council on 7th Apr 2005 reject the government's plan to include a Casino in its call for an IR, so based on what you said now, something is wrong with either you or WP here.

    Again jacys,you dont have to tell people that you are a physically and mentally weak "mad dog" cos we already know it long ago.
  • Chin Too Lan - Hey, Mr Minister, time to walk the talk!
    Swee Say, that pock-marked faced RI Tiochiu running dog, did say companies and businesses should first re-deploy instead of retrenching, didn't he???

    And that urging came just a few days before this biggest of Singapore banks (that rather pays foreigners for their Lehman losses than fellow compatriot-investors) took out the biggest and sharpest axe, did it not???

    So, what happened in between?

    In imes like these, perhaps some ministers themselves could also go, saving taxpayers millions of unnecessary expenses paying these bums.

    Start off with SWEE SAY:
    As Labour supremo, he ought to stand shoulder to shoulder with fellow retrenchees, suffer alongside them.

    Then Minister in PMO, BOON HENG, Swee Say's predecessor at NTUC fellow and clansman from Swatow:
    As Minister [u]without Portfolio[/u], he has [u]no one, nothing and no issue under his purview[/u], right?
    So taxpayers have no reason now to keep feeding his family rice, let him go back to the good old Tiochiu value-ways of eating salted fish, salted eggs.

    In any case, PAP has always said these are true talents who have 'sacrificed' better pay packages to take up public office, yes? So they must have no problems hopping over to the private sector - and their families will be much happier for them too since it would mean more $$$

    Yes, with that in mind, would Hokkien traitor ENG HEN please step aside and go back to his much-cherished medical practise? Thank you for making the hundreds of millions so you can then pay IRAS more millions than you ever could as a Minister.
  • tewniaseng
    I hope IR will fail,no tourists will come here, let the pap lose face and see what they say in the next GE.Pap is so super talented and yet they plan the wrong move.Who want to gamble here, i prefer Genting, a more natural environment.
  • LIM TUNG HEE - Interrupted Resort(IR)
    God sure has a way to answer prayers!
    Many religious groups had opposed to the idea of IR casinos when it was first mooted.Now it seems God willing,it will not happen too soon at least.
    Our poor citizens as it is are already exposed to gambling of sorts on a daily basis- horse racing,Toto,4D,Big Sweep,Slot machines and Casino cruise ships..With these temptations conveniently sprouted across the island,it is easy for hard-up working people to become addicts or victims of these vices.
    In fact the social costs have made many families dysfunctional.
    Since the government has always claimed success in its handling of the economy and investments, it should find ways to
    generate revenue other than exploiting these means.
    Moreover,with the influx of foreign workers competing for jobs amidst a bad recession,this dire situation should be fixed immediately...
  • Husrin - Haha
    [quote=Anonymous][quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]

    Thank you for letting us all know the WP's perspective on this issue, and that you in fact stand united with the PAP.

    Now we have a few more reasons for why we SHOULD NOT VOTE FOR YOU.[/quote]




    Power ah siol.



    I swear Jacys's credibility gets worse everyday.
  • CST #1
    If Sands becomes bankrupt, SDP and their clowns will celebrate because at least 20,000 jobs will be lost and many of Singaporeans livelihood will be affected.

    If Sands starts in 2010 full steam, SDP and clowns will jeer because of vice and other activities. Damn if you succeed, Damn if you fail. Heads, tails we lose. So much for a patriotic SDP.
  • G Chen - re:
    CST #1, you must be the 1st and probably the only damnest fool in the world to equate patriotism with CASINO. How shallow can you be. Too bad IR dont need a clown, otherwise you should apply.
  • MOF (Matter Of Fact) - Get used to it - if you haven't already done so
    [quote]The DBS can surely find a less harsh and impulsive way to solve the problem as it is a national symbol.Any rash act will definitely hurt the sentiments of
    the retrenched;especially our local workers![/quote]

    God, you sound as though you've been shell-shocked by this episode.

    What's there to be? You get screwed everyday by PUB/SP Services, Town Councils, SBS Comfort Delgro-Citicabs-Union-SmartCab-SMRT-TransitLink-LTA, etc, etc, etc, etc, it isn't as if you do not know such things can and WILL happen right here in Singapore.

    Heck, you've been screwed by PAP for as long as since they first won ABSOLUTE MAJORITY in Parliament way back in 1976 (?). You mean you guys didn't see all these coming???

    Failure of history class and of history's lessons then.

    No need to be alarmed. For now.

    IN THE WEEKS AND MONTHS TO COME, NEWS WORSE THAN A MERE 900 DBS STAFF-CUT WILL KEEP SURFACING JUST WHEN YOU THINK THE LAST ONE WAS BAD ENOUGH - ONG BENG SENG'S POST-ALMA MATER ACS/BUSINESS WORLD'S MOTTO IS "WORST IS YET TO BE".

    Cheer up, folks. Think about it, WHAT is the WORST that can happen???

    Death of Kwa Geok Choo, then followed to her grave by a grieving, inconsolable Lee Kuan Kwan, then Lee Hsien Loong & family's flight from Singapore?

    Or the total collapse of the Republic??

    Or both???

    Whichever way and however the scanrio pans out,
    YOU SINGAPOREANS CANNOT BE ANY WORSE OFF THAN NOW HAVING TO LIVE UNDER SUCH IMPOSSIBLE DICTATORSHIP THAT MASQUERADES ITSELF AS A DEMOCRATIC, OPEN-SOCIETY CITIZEN-LOVING GOVERNMENT!

    Think about it.
  • Anonymous - What goes round comes around
    [quote]Short Sighted Leaders - Million Dollar Short Sighted Leaders Sun, 09 Nov 2008 5:22 pm

    How can they be SO IGNORANT.
    [/quote]


    How could they NOT be?

    You are talking about a bunch of monkeys put into public ofice by the rest of the monkeys election after sham election!

    How to have a leadership with forsight and vision when their 'followers' who are in fact these leaders' bosses, albeit once every 5 years, do not make good meaningful use of their ballot paper - their pent-up voices every 5-yearly???

    Everything under the heavens is ULTIMATELY FAIR: you reap what you sow.

    And dumbass people in Singapore got what they deserve (wanted).

    You guys are the butt of the world's JOKE! Even Zimbabwens, North Koreans and Myanmese can laugh their heads off when they look at you Les Miserables!
  • Anonymous
    [quote]The PAP govt is no different from tyrants and despots that you find in third world countries.[/quote]

    Oh no, no, no.

    PAP is DIFFERENT! It is a LEGAL DICTATORSHIP, LKY is a LEGAL TYRANT. Everything he does and they do has been passed down and legislatively approved.

    And it's all becuase Singaporeans allowed them to do so - returning them to power and also giving them absolute parliamentary majority election after election.

    Yours is a country which is 'fortunate' enough to even conduct polls - unlike Myanmar and others - where you get to 'speak up', choose who you want to lead you, albeit only once every five years.

    But dumbass Singaporeans - scum of the human race - just do not KNOW how to exercise that RIGHT!!!
  • Lim Chee Onn - GAME OVER! Please slot in a new token...
    Hell, you know the game is up for Sands when there's even market talk of CapitaLand planning to take up stake(s) in the IR.

    Or maybe the Government is planning, through CapitaLand, GIC, Temasek or whatever vehicle at its disposal, to take over the real golden goose - Las Vegas Sands itself!!! That's even better - just like landing prestigious UBS, Citi, ML, etc.

    Heck, talk even has it that Singapore - through its very profitable, bloodsucking NTUC Income insurance arm - is planning to bail out AIG!!!

    My word of advise, tip in fact, to you all who wanna make a quick buck:
    IT AIN'T CAPITALAND, IT'S MY KEPPEL CORP/KEPPEL LAND THAT'S FIXED A DEAL WITH SANDS/STB/LKY for the IR thing. Go grab a few lots of those shares NOW - you'll be thankful you did.

    And while you're at it, open an account with an American broker, scoop up ALL AIG SHARES you can lay your hands (disposable cash) on - this time you gonna hit THE JACKPOT like Oei Hong Leong never did, heehee, that China-apple polisher son of Sinar Mas, hahahaha
  • Tommy - re: Most Singaporeans support the PAP's IR plans
    [quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]

    I'm against from the start.Been to many casino around the world. These are the common trends

    - Many pawn shops around
    - Prostitution. I, personally was approached by many. :)
    - Gang related activities
    - Crimes

    I don't think anyone need a degree to understand the harm of gambling... I simply don't understand why we are still going ahead with the IR.

    It's a bottomless pit and we are still jumping in.
  • Tommy - re: re: Most Singaporeans support the PAP's IR pla
    [quote=Anonymous][quote=jacys]Opposed by "many" Singaporeans ??? Can you show us the figures ?

    Other than a few religious right who oppose the casinos on moral grounds, the majority of Singaporeans support the PAP's plans to diverstify the economy including the Workers' Party.

    If even the opposition WP supports the PAP's plans, it shows what they are doing is correct.

    WP is a constructive opposition which does not oppose for the sake of opposing unlike some "mad dog" here.[/quote]

    Thank you for letting us all know the WP's perspective on this issue, and that you in fact stand united with the PAP.

    Now we have a few more reasons for why we SHOULD NOT VOTE FOR YOU.[/quote]

    As long as it's a vote against PAP.. vote for WP or SDP also can...

    (nice try, I know what you are trying to do)
  • ????
    the sdp reports such depressing news abt spore's economic prospects with such detectable partisan slants and relish... why?

    DOES IT MAKE U JUMP FOR JOY IF SPORE WERE TO SINK AND GO UNDER THE NEXT DAY?

    come on, grow up. even if u dont like pap, keep the politicking to the politics. who will benefit if IR sands fail?

    YOU? just becos this fail pple will swing to your side? pray tell, what have u concretely done for the spore economy other than selling badges and books for your own party's use?

    i dont see u contributing those sale revenues to say the disadvantaged or the low income students.... you jus waste all of that producing books and travelling here there everywhere trying to meet foreign counterparts.

    you are a shame and it is a disgust that you claim to be working and fighting for my rights. stop giving yourselves the limelight. it seems like u r fighting for yourself more than for me.

    where is the plan for the current economic recession? what should we do? if u were to win in an election now, what is your plan from day one?

    plans... plans... plans... you are lacking in all of it but only a very noisy mouth apt at complaining. how can u expect us to vote for such a shameless and incompetent party?
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