Friday, August 27, 2010

Dubai World might Sell CityCenter Stake

Dubai World, the 50% owner of CityCenter might be looking to sell its share of the property. According to a Reuters report, the company has shown a willingness to sell off core strategic assets in order to reach a re-structuring deal with creditors.

Dubai World paid $2.2 billion for a 5.9 percent stake in MGM in October 2007 and $4.8 billion for an investment in CityCenter. Those investments are now worth a fraction of what they paid. Their stake in City Center is probably worth about a billion dollars now, while their shares of MGM are worth even less than that.

While this news technically means that 50% of CityCenter is on the selling block, in reality it is unlikely a deal will be done anytime soon. Critics are saying that the sale of assets is unlikely and is only being talked about to appease creditors. Even if Dubai World was serious about selling CityCenter I doubt there would be any buyers in this market.

Source: Reuters.