Casino operator Melco Resorts & Entertainment Limited (MLCO) announced Monday that it has entered into an agreement to acquire from its parent company, Melco International Development Limited a 75% equity interest in ICR Cyprus, which is developing the City of Dreams Mediterranean integrated destination resort project.
Melco will purchase the equity interest in exchange for 55.5 million ordinary shares in the company, representing approximately US$375 million.
The transaction was approved by a special committee of independent directors, who engaged independent financial and legal advisors to assist in its evaluation process. It was also approved by the Audit and Risk Committee of the company.
The purchase is subject to customary closing conditions, such as the approval by certain Cyprus regulatory authorities, and the execution of a new shareholders’ agreement by the company.
The proposed new shareholders’ agreement contemplates certain commercial and financial arrangements under which Melco will provide certain corporate-level management services to the ICR Group for a fixed amount of EUR2 million a year and have the right to receive an allotment of preference shares in the gaming license-holding subsidiary of ICR Cyprus which will provide the right to a preferential dividend, among other terms, the company said in a statement.
ICR Cyprus, through a subsidiary, holds a 30-year casino gaming license, which commenced in June 2017. It is currently operating one casino and two satellite casinos in Cyprus, the first of which opened in Limassol in June 2018 as the first licensed casino in Cyprus and will continue to operate until the opening of the City of Dreams Mediterranean.
Upon completion, City of Dreams Mediterranean is currently expected to have a 7,500-square-meter gaming area comprising over 100 tables and over 1,000 state-of-the-art slot machines, a five-star hotel with approximately 500 rooms, world-class international restaurants and cafeterias, an outdoor amphitheater and MICE and other facilities.