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MGM Resorts plans to tap as much as US$1.5b in backup loans
[NEW YORK] MGM Resorts International plans to draw down as much as US US$1.5 billion in backup loans, according to a person with knowledge of the matter, the latest company hit by the coronavirus to seek liquidity.
The Las Vegas-based company joins rivals including Wynn Resorts Ltd and Penn National Gaming Inc in seeking to shore up its balance sheet as the global pandemic roils markets and forces closures.
MGM, already hurt by a reduction in travel to its Macau properties, which were forced to close for 15 days, is suspending operations of its casinos in Nevada, New Jersey and other states to help prevent the spread of the disease.
MGM shares plunged as much as 25 per cent on Monday in New York to US$11.56, the biggest intraday drop since May 2009. The stock had fallen more than 50 per cent in the past month through Friday, outpacing declines in the S&P 500 Index.
The casino operator last week terminated an offer to buy back US$1.25 billion in shares.
"We believe the company has ample liquidity to weather the current uncertainties in the marketplace," Jim Murren, MGM's chairman and chief executive officer, said at the time.
In addition to the revolving credit facility, the company has cash investments of about US$2.4 billion.