MGM Resorts International said on Tuesday that it will sell its Bellagio and Circus Circus resorts in Las Vegas in separate deals valued at about US$5 billion, Reuters reports.
Blackstone Real Estate Income Trust will acquire the Bellagio for US$4.25 billion through a 95-5 joint venture with MGM and will lease it back to a unit of the casino company for an initial annual rent of US$245 million, according to the report.
MGM, meanwhile, will sell Circus Circus Las Vegas to an affiliate of Treasure Island owner Phil Ruffin for US$825 million.
The divestment come nine months after MGM, which had a long-term debt of US$15 billion as of December 2018, formed a committee to evaluate its real estate portfolio amid its move to an asset-light mode, Reuters notedl.
MGM CEO Jim Murren was quoted as saying that the company will use the proceeds from both the deals to “build a fortress balance sheet” and return capital to shareholders.
Both deals are expected to close in the fourth quarter of 2019.
In January, MGM announced plans to cut costs and boost growth, proposing to increase annualized adjusted earnings before interest, taxes, depreciation and amortization by US$300 million by the end of 2021.
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