MGM Mirage and Dubai World announced an agreement that will immediately free up the $1.8 billion needed to finish construction of CityCenter.

The agreement allows MGM Mirage and Dubai World to fund the remaining equity contributions to the project with letters of credit. It also will result in Dubai World dropping its lawsuit against MGM Mirage.

The deal requires MGM Mirage to assume full responsibility to pay for any cost overruns. The company had to pay lenders $100 million in return for waivers necessary to finalize the deal. It also establishes a higher interest rate—2 percentage points higher than the original agreement—on the $1.8 billion loan.

“This is the best possible outcome that we could have envisioned,” MGM Mirage CEO Jim Murren told Bloomberg News.

He said the announcement helps protect the company from having to unload any of its properties to fund the project.

“If anyone thought they were going to get a bargain-basement special deal, today's announcement will disappoint them,” Murren said.

In addition to dropping its lawsuit against MGM Mirage, Dubai World has also agreed to repay the company $135 million for equity payments made on its behalf over the past month.

By Casino Connection Staff