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MGM Heaves a Sigh of Relief
Shares of MGM Mirage Inc. (MGM - Snapshot Report) shot up a day after the casino giant said it no longer faced a bankruptcy concern.
As the global economic slump took the shine off the once thriving gambling industry in Las Vegas, MGM Mirage warned in March that there was "substantial doubt about its ability to continue as a going concern" due to mounting debts. The stock had slumped below $2 at the height of bankruptcy concerns.
Billionaire investor Carl Icahn has been pressuring the company to restructure its $13.5 billion debt through bankruptcy protection.
In a filing with the Securities and Exchange Commission late on Tuesday, MGM Mirage said that the $2.6 billion it raised by selling debt and equity last month will enable it to retire its short-term debt that had given rise to the going concern clause.
This would certainly bring some relief to Kirk Kerkorian, who owns a majority stake in the beleaguered company. If MGM were to file for bankruptcy, secured debtholders would get priority over shareholders.
Shares of the company were up more than 13% to $6.64 at noon on the New York Stock Exchange after reaching as much as $6.83 earlier in the session. They are, however, still far from a 52-week high of $39.50.
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| Market Summary | Feb 10, 2010 06:31 am ET |
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