MGM Mirage, Colony Capital Loan Discussions Said to Be On Hold

April 10 (Bloomberg) -- MGM Mirage’s talks to get a $750 million secured loan from Colony Capital LLC have been put on hold as the casino company focuses on negotiations with banks, two people with knowledge of the discussions said.

Talks with Colony, the Los Angeles-based private equity firm, may restart and a loan is still possible, said the people, who declined to be named because negotiations are private. Colony and Australia’s Crown Ltd. were considering a debt investment in Las Vegas-based MGM Mirage, people familiar with the talks said this week.

MGM Mirage, controlled by 91-year-old Kirk Kerkorian, has until May 15 to offer a plan to restructure debt totaling more than $12 billion. The company also has been funding construction of the multibillion-dollar CityCenter development on the Las Vegas Strip alone after partner Dubai World sued and asked to be relieved of financing obligations.

The next CityCenter payment is due on April 13. Bank waivers allowing MGM Mirage to cover state-owned Dubai World’s half also expire on that day.

Spokespeople for MGM Mirage and Colony Capital declined to comment to Bloomberg News.
Geoff Kleeman, a spokesman for Melbourne-based Crown, didn’t return voice-mail messages left by Bloomberg on his office and cell phone outside of business hours.

The Wall Street Journal reported yesterday that Colony had ended talks with MGM Mirage. Alan Feldman, a spokesman for MGM Mirage, said the company continues to hold talks with investors and declined to identify them, the newspaper said.

MGM rose 55 cents, or 12 percent, to $5.30 yesterday in New York Stock Exchange composite trading. The shares have more than doubled this month.

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