Casino firm to sell shares to meet debts
Posted by Bev Freeman on 14 Aug 2009 at 13:08
Australian casino company Melco Crown Entertainment is looking to raise $200 million from a share sale to help pay back debts, according to reports.
Bloomberg said the firm, a partnership between James Packer, the Australian entrepreneur, and Lawrence Ho, son of Macau gambling tycoon Stanley, is offering 37.5 million American depository shares or 112.5 million common shares.
The financial news provider also said this represents a seven per cent stake in the company.
The firm is looking to raise money as it battles to up the progress of repayment on a loan it took out to build the City of Dreams project in Macau.
Macau has been hit by the global slowdown and revenue and visitor numbers have been on the slide.
A number of high-profile projects have been put on hold as a result, including a development by Las Vegas Sands.
City of Dreams opened its doors in June, and is one of the biggest facilities on the Cotai Strip in Macau. It has more than 500 gaming tables and also features shops and leisure facilities.
According to a statement to the Hong Kong stock exchange last month, the City of Dreams pulled in 1.2 million visitors during its first month.
Revenue share in Macau for Melco Crown has since gone up to 17.8 per cent in July, compared to nine per cent in June.
According to Bloomberg, the firm said all or part of the $189.2 estimated net share sale proceeds will go towards repaying loans taken out to construct the City of Dreams.
According to filings around $1.68 billion of the loan facility was outstanding at the end of June. Bloomberg added in its report that it had attempted to contact the chief financial officer of Melco Crown but failed to get hold of him before publication.
The Melco Crown share sale is to managed by Citigroup Inc. and Deutsche Bank AG, and is set to be priced on Thursday.
Shares in Melco crown have climbed 62 per cent in 2009 after dropping 73 per cent in 2008.
