MGM Resorts gains $ 700 million through an operation with the company that owns its facilities (MGM Growth Properties)
MGM Resorts International has received approximately $ 700 million after a financial transaction in which it has disposed of part of its shares owned by its associated real estate investment agency, MGM Growth Properties. The move gives MGM Resorts more liquidity in the difficult context of the COVID-19 pandemic.
MGM Resorts International and MGM Growth Properties have announced the redemption of 30.3 million of MGM Resorts’ operating partnership units for $700m. These units have been redeemed by MGP, which expects to increase regular dividend to an annualized $1.95 per share. Through the deal, MGM now has $700m remaining under its agreement with MGP to acquire up to $1.4bn MGM Resorts’ Units for cash until February 2022.
The operator plans to use the funds to repay amounts drawn under its revolving credit facility. Bill Hornbuckle, CEO and president of MGM Resorts, said: “Today’s announcement is another example of our efforts to bolster our already strong liquidity position during the COVID-19 pandemic. As we gear up to reopen and safely welcome our guests once again at our properties across the US, maintaining a strong balance sheet and preserving our financial flexibility remain critical pillars of long-term success.”
In March, MGM Resorts announced its plans to buy back up to $1.25bn of shares, after the coronavirus outbreak caused a drop in its stock prices. Hornbuckle was appointed acting CEO and president of the company in the same month, to replace former chairman and CEO Jim Murren.
