Talks between MGM Mirage and Los Angeles investment company Colony Capital about a possible investment in the struggling gaming company have collapsed, the Wall Street Journal reported Thursday night.
The Journal reported earlier this week that Colony Capital and Australia-based gaming company Crown Ltd. were discussing making an investment in the gaming company, which would be secured by one or more of the gaming company’s casino properties.
MGM Mirage has been struggling to meet payments on its $13 billion in debt and continue construction on its $8.6 billion CityCenter project while revenues at its casinos have tumbled.
The CityCenter project, which is scheduled to open later this year, is jointly owned by MGM Mirage and Dubai World, a conglomerate owned by the Dubai government. Dubai World, however, last month sued its partner and has stopped making payments to continue construction.
The Strip project could be forced into bankruptcy if a $70 million payment that is due next week isn’t made by the partners.
Dubai World said in its lawsuit that MGM Mirage has mismanaged the project and driven up construction costs.
MGM Mirage warned investors last month in a Securities and Exchange Commission filing that it might have to file for bankruptcy because it could default on some of its loan covenants.
A person close to Colony said the company might re-engage with MGM Mirage again, depending on the outcome of MGM Mirage’s other negotiations, the Journal reported.