International edition
June 24, 2021

Money to go toward Belle Grande Manila Bay casino resort

Melco Crown us$ 377 million share sale for Manila casino

(Philippines).- A unit of Macau casino investor Melco Crown Entertainment confirmed in a filing to the Philippine Stock Exchange it has raised us$ 377 million for a Manila casino joint venture. Melco Crown (Philippines) Resorts did so via a private placement, as previewed by Business Daily on April 16.

T

he money will go toward the fitting out and management of the US$1 billion Belle Grande Manila Bay casino resort. The facility – part of a Las Vegas-style strip of multi-billion US dollar casino resorts planned for an area of Manila Bay known as Entertainment City – is being developed jointly with Filipino Chinese businessman Henry Sy.

The Melco Crown share placement for Belle Grande was completed yesterday and was heavily oversubscribed. The share sale was priced at us$ 33.88 per share, said UBS Philippines managing director Lauro Baja. UBS and Citigroup are jointly managing the sale.

“The order book was over six times oversubscribed with 140 investors,” stated Baja.

According to the filing by Melco Crown (Philippines), it sold 981.183 million shares and another 117.075 million in overallotment shares.

FinanceAsia reported that interest was particularly strong among US investors, with good backing from existing shareholders of the Melco Crown parent. The parent will retain a near 70 % interest in Melco Crown (Philippines).

Private placements of stock – usually to sophisticated investors such as fund managers and high net worth individuals – typically have a lock up period preventing investors from taking short-term profits. Disclosures about risk are fewer than in a public offering.

Melco Crown (Philippines) said in a statement to the local media that the transaction will broaden its investor base and widen its public float to 30.42 % from the current public ownership of 10.01 %.

The company earlier asked the Philippine Stock Exchange to suspend trading in its shares while the price for the share offering was being determined. Earlier this month, Melco Crown (Philippines) also raised 2.13 billion pesos from the sale of 150.43 million treasury shares, priced at 14.20 pesos apiece.

EBITDA deal

Melco Crown (Philippines) Resorts is an off the shelf Manila-listed entity formerly known as Manchester International Holdings. Belle is part-owned by Sy family conglomerate SM Investments Corp. SM and Belle are supplying the land and constructing the shell of the Belle Grande complex. Melco Crown (Philippines) will fit out the building and provide the gaming equipment.

It will also have exclusive operating rates for the venue, and receive 50 percent of gaming earnings before interest, taxation, depreciation and amortisation (EBITDA) and 100 percent of non-gaming EBITDA. Just under 7% of the 250,000 square metres of gross floor area is expected to be for gaming.

In its filings to the Manila exchange, Belle Corp. has described Belle Grande Manila Bay as a us$ 1 billion project. It’s likely to have more than that spent on it eventually.

On Monday – probably encouraged by the strong response of investors to the Melco Crown share placement – Belle said it had asked the country’s government to let it lease an additional 10 hectares of land for expansion. Manuel Gana, Belle’s executive vice president and CFO, wasn’t specific on how the extra land would be used.

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