SJM Holdings has announced that it will acquire Oceanus from its parent company STDM and promised to return the Oceanus gaming area to the Macau government after the existing Macau casino gaming concessions expire on 31 December 2022. However, this does not preclude it from re-acquiring the gaming area from 1 January should it win a new concession.
SJM Holdings says it will acquire Oceanus by issuing HK$1.906 billion worth of 5-year convertible bonds to STDM with an annual interest rate of 2%. The Oceanus non-gaming area is said to be worth HK$516 million with the gaming area worth HK$1.39 billion. The total gaming area is 13,576 square meters.
If the convertible bonds are exercised, STDM’s stake in SJM will increase from the current 54.7% to 58.1%.
In addition, STDM will submit a letter of commitment to the Macau government. According to the requirements of the satellite contract between STDM and SJM, the Oceanus gaming area will be returned to the Macau government after the concession (and therefore the satellite contract) expires on December 31 this year. The acquisition has seemingly been made in anticipation of a formerly contemplated requirement of the new Macau gaming law that concessionaires would be required to own the real estate in which gaming is conducted, thus assisting SJM in its bid for a casino gaming concession post December 2022.
However, early this month it was announced that this requirement was set to be relaxed.
Oceanus’ original acquisition by STDM was in 1999 at a cost of HK$689 million. SJM says that Oceanus is one of the better performing casinos in its group.