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MGM Mirage Shares Up 35% on News of Deal

MGM Mirage reaches an agreement with Dubai World to stave off CityCenter bankruptcy. The stock jumped 35% in the day's trading.
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The troubled casino-hotel operator MGM Mirage

(MGM) - Get MGM Resorts International (MGM) Report

saw its stock surge 36% Thursday after the company reached a deal with its partner in an $8.5 billion Las Vegas resort project -- called CityCenter -- that will keep construction going.

By the end of the session Thursday, MGM Mirage shares were trading at 8.38, up 2.20, or 35.6%, on six-times daily average volume.

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As reported late Wednesday, MGM Mirage reached an agreement with partner Dubai World, the investment arm of the Dubai government, and the pair's creditors. The partners both agreed to fulfill their payment obligations with letters of credit, while Dubai agreed to drop a lawsuit against MGM Mirage, which alleged cost overruns and general mismanagement of the project.

MGM Mirage, majority owned by Vegas billionaire Kirk Kerkorian, had been struggling with its own solvency of late, while Dubai, for its part, had skipped two of its CityCenter payments.

The partners' creditors agreed to put up an immediate $1.8 billion to finish construction on the project. According to MGM Mirage, the CityCenter resort is scheduled to open in December this year.

MGM Mirage also said Wednesday that it had reached a separate agreement with its own lenders to waive payment obligations until June 30, extending a prior agreement by one and a half months.

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