Inside Asian Gaming

INSIDE ASIAN GAMING | May 2011 52 Briefs Regional Briefs denominated bond offering. Approval in principle has been received for the listing of the bonds on the Singapore Exchange Securities Trading Limited (SGX-ST). The company said it would use the proceeds to fund potential expansion opportunities, which could include acquisitions, without giving details. Proceeds would also be used to repay debt, partially to pre-fund interest payments on the bonds, and for working capital and general corporate purposes. A person familiar with the deal told The Wall Street Journal that the company has hired Bank of America Merrill Lynch, Citigroup, Deutsche Bank and The Royal Bank of Scotland as book runners. MPEL also said it had reached a deal with a group of lenders to arrange and underwrite credit facilities of approximately US$1.2 billion, primarily to refinance the company’s City of Dreams project on Cotai. MPEL is co-chaired by Lawrence Ho, son of Macau gambling entrepreneur Stanley Ho, and Australian businessman James Packer, son of the late Kerry Packer. Judge’s ruling sets back Pearl Delta ‘super bridge’ plan A Hong Kong court ruling could delay by at least six months the start of building work on the Hong Kong-Zhuhai-Macau Bridge across the Pearl River Delta. The court ruled that Hong Kong’s director of environmental protection, Anissa Wong, should not have granted permits for the construction and operation of the bridge’s boundary crossing facilities, and a seven-mile link road. Judge Joseph Fok said impact assessment reports did not meet the required standard. The court decision came after a retired Hong Kong resident, Chu Yee Wah, requested a judicial review arguing the construction of the project would adversely affect her health. Hong Kong’s Transport and Housing Bureau said the target of completing and commissioning the bridge by 2016 was still viable. Galaxy group EBITDA up 71% in 1Q 2011 Galaxy Entertainment Group (GEG) said its first-quarter 2011 earnings before interest, taxes, depreciation and amortisation were up 71% year on year. They rose to HK$712 million (US$91.56 million) from HK$417 million a year earlier. Revenue was up 45% to HK$5.73 billion. The company didn’t disclose its first-quarter net profit. Group results continue to be driven by StarWorld Hotel & Casino, the company’s flagship, VIP-focused property on Macau peninsula. StarWorld accounted for 86.5% of group revenue in 1Q 2011. The property generated HK$4.95 billion of the group’s HK$5.73 billion revenue in the quarter. The company attributed StarWorld’s continuing strong performance to its focus on quality service. HK Listing Committee seeks more information on MGM China flotation plan MGM China Holdings Ltd—a vehicle stemming from the Macau casino joint venture between MGM Resorts International and Pansy Ho—has reportedly been asked to give more information about its proposed shareholder structure before Hong Kong Stock Exchange will agree to it listing in the city. Since the MGMMacau casino opened in December 2007 at a cost of US$1.25 billion, the development costs (it’s not yet broken even) have been shared 50:50 by the JV partners. After the listing—that could raise US$800 million to US$1 billion—MGM China will become the owner of MGM Grand Paradise, S.A., the Macau company that owns the MGM Macau resort and casino and the related gaming sub-concession. Under an arrangement due to come into effect after the IPO, the Las Vegas-based casino operator will get 51% ownership of MGM China. Ms Ho will retain a 29% interest in the public company, with the remainder of the equity sold to the public and the proceeds going to entities controlled by Ms Ho. “The Listing Committee has issued a comment letter as a part of their on-going review process,” MGM Resorts said in a statement, without commenting directly on claims in Hong Kong Chinese- language newspaper Apple Daily that officials were seeking assurances on who will be the controlling shareholder. “MGM China continues to work closely with the [stock exchange] to address all remaining items in order to achieve a prompt listing of its shares,” said MGM Resorts. “The timing or terms of any such listing have not yet been determined, and there is no assurance as to whether MGM China will ultimately proceed with the listing, or whether the application will be approved by the [stock exchange],” the company added. “The press reports that suggest MGMChina’s proposed corporate structure would be—if accurate—modestly negative for the shares,” Jefferies & Co. gaming analyst David Katz told investors. “The proposed structure was intended for MGM to retain majority ownership of its most valuable asset, while receiving a US$300 million cash infusion into its US parent.” Under the complex arrangement for the post-IPO structure, Ms Ho will buy US$300 million of debt-heavy MGM Resort’s convertible senior notes on terms similar to its existing 4.25% convertible senior notes that are due 2015, said MGM Resorts in a filing with the US Securities and Exchange Commission in New York. MGM China is also awaiting land rights to build another property in Macau’s Cotai district. MPEL’s yuan bond issue to list in Singapore Macau casino developer Melco Crown Entertainment Ltd (MPEL) plans to raise around US$350 million through an international yuan- MGMMacau—no date yet for Hong Kong listing MPEL bond listing in Singapore