The casino company in which Dubai World has a stake is under pressure as gambling income tumbles.
MGM Mirage to take $1.2 billion writedown
NEW YORK // MGM Mirage, the casino company in which Dubai World holds a sizeable equity stake, said on Friday it would writedown the value of the Mandalay Resort Group, the casino company it bought in 2005 for about US$5 billion (Dh18bn). In the last year the Las Vegas gambling boom has ended and the property market deteriorated sharply, sending the value of casino properties plunging and putting a financial squeeze on operators. In August 2007, Dubai World invested almost $5bn in MGM Mirage, giving it just under 10 per cent of the company.
Along with its equity stake in MGM also became a joint venture partner with the US gaming firm in Project CityCenter, one of the US's largest construction projects that will see a substantial remodelling of the city centre of Las Vegas. In a regulatory filing late on Friday, MGM Mirage said it will recognise a non-cash impairment charge of about $1.2 billion in its fourth-quarter results, representing substantially all of the goodwill it recognised when it closed the deal.
The purchase of Mandalay, which operates the Mandalay Bay, Luxor and Excalibur resorts in Las Vegas, propelled MGM Mirage into the position of the world's No. 2 casino company, behind Harrah's Entertainment. email@example.com