Sands China Ltd., which operates three casinos in Macao, raised HK$19.4 billion ($2.5 billion) in its initial public offering in Hong Kong on November 16, hitting the bottom of the share price range.
The company sold 1.87 billion shares at HK$10.38 each, the low end of a HK$10.38 to HK$13.88 price range, missing the HK$26.3 billion expected by Sheldon Adelson, chairman of Las Vegas Sands Corp., Sands China's parent company.
The sale represents a 23 percent stake in the company, which is valued at HK$83.4 billion.
This sale will enable the company to restart projects frozen one year ago in Macao, said Adelson earlier in November.
Last year Las Vegas Sands was forced to suspend construction on an extension to the Venetian Macao integrated resort complex, called "Lots 5 & 6", which includes the world's largest casino, and warned investors that failure to raise emergency funds could result in "substantial doubt about our ability to continue as a going concern".
Investors are still concerned over the company's ability to turn things around with its casinos in Macao, according to analysts, pointing out that total casino revenues in the former Portuguese enclave fell 12 percent during the first six months this year compared with the same period last year.
The Nevada-based Las Vegas Sands has struggled with a heavy debt load since the start of the global financial crisis, and is seeking to boost the value of its overall business by listing its Macao division on the Hong Kong Stock Exchange.
"We have more (Las Vegas) group room nights on the books for 2010 than we expect to realize in all of calendar 2009," Adelson said during a conference call with analysts and investors in October.
In addition, according to analysts and bankers, Sands China's pricing power has been constrained in part by the precedent set that share prices of Wynn Macau Ltd., operator of hotels and casinos and listed on the Hong Kong stock exchange in October, have fallen 13 percent to HK$9.39 by Nov. 20.
