MGM Resorts International says it will receive a cash injection of US$1.2 billion after real estate investment trust MGM Growth Properties LLC (MGP) completed the redemption of 37.1 million operating partnership units under an agreement inked last year.
The redemption, which sees MGM’s stake in its REIT drop from 53.0% to 42.1%, represents the third such transaction after MGP redeemed US$700 million worth of units on two separate occasions last year, in May and December respectively.
MGP’s extensive US property portfolio includes MGM Grand, Mandalay Bay and Luxor on the Las Vegas Strip – all of which are operated by MGM Resorts – plus the Borgata in Atlantic City and MGM National Harbor in Washington DC among many others.
“Today’s announcement further demonstrates our commitment to the company’s asset-light strategy as we have significantly reduced our ownership stake in MGP to 42%, from 61% just one year ago,” said MGM’s Chief Financial Officer and Treasurer, Jonathan Halkyard.
“Our strong liquidity position has been an invaluable asset to the company through the crisis. As the broader recovery in our core business and our cost efficiency efforts begin to pave a tangible path to free cash flow generation, we will remain prudent in allocating our capital to maximize shareholder value, including executing on key growth opportunities, maintaining a strong balance sheet, and returning cash to shareholders.”
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