Las Vegas Sands Unlikely to Restart Dividends Payouts until Late 2022

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Las Vegas Sands (NYSE: LVS) is unlikely to restart its dividend until at least late 2022. However, LVS can restarts dividends before 2022 if it meets certain liquidity requirements with a group of creditors.

In exchange for resumption of payout, LVS is being encouraged by consortium lenders including, the Bank of Nova Scotia, to sell its Las Vegas assets that include; Venetian and Sands Expo & Convention Center.

LVS has already announced the sale of the venues to Apollo Global Management (NYSE: APO) and VICI (NYSE: VICI) for $6.25 billion. However, the sale was barred by a previous accord with creditors has been waived.

In this waiver, LVS is held off from restarting payout unless its liquidity surpasses $1 billion. The pact also revised and extended the period LVS is not required to keep a consolidated leverage ratio of 4-to-1 to the end of 2022. The creditors also increased the minimum liquidity requirement an operator should carry to $700 million.

Due to the coronavirus pandemic, Sands halted its April 2020 payout as all its venues had been shuttered. LVS had one of the best payouts in the gaming industry and the best track records of payout growth.

LVS suspended dividends when it was 43.16 and yielded 6.88 percent annually. Sands wasn’t the only dividend offender in the gaming space. Other competitors also either suspended or cut payouts. Though dividends are soaring this year and surpassing the pre-pandemic, casinos are yet to realize full potential.

If sands suspended payouts, it could save $2.34 billion every year on its 742.82 million shares. However, analysts believe Sands could restart payouts with some of the cash. However, the new lender pact diminishes the chance of that happening.

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