Melco hikes casino capex
MANILA, Philippines–Casino operator Melco Crown (Philippines) Resorts Corp. is planning an equity offer via “top-up” placement to cover part of P9-billion increase in capital outlays for the upcoming integrated resort City of Dreams Manila.
The board of Melco approved an increase in the total budget for City of Dreams Manila to $832 million (approximately P37 billion at the present exchange rate) from $680 million (P28 billion) alongside fresh fund raising through a top-up equity placement, the company disclosed to the Philippine Stock Exchange on Wednesday.
Melco went on a voluntary trading suspension on the local bourse on Wednesday in anticipation of this fund-raising activity which may affect material trading on shares.
Market sources estimated that Melco would raise around $168 million in a deal arranged by foreign bank Deutsche Bank.
Other sources estimated that Melco shares may be offered at between P11.30 and P11.70 per share versus the last traded price of P12.18 per share on Tuesday.
A top-up equity placement deal means that the controlling stockholder of Melco, MCE (Philippines) Investments Ltd., will lend some of its secondary shares for sale to the market for a quicker fund-raising deal. The company will afterward issue the same number of primary common shares to MCE Investments and these replacement shares will be listed on the local bourse, which means that the proceeds will go to the company.
Melco has a market capitalization of P53.9 billion at the local stock market to date.
City of Dreams Manila, which will open by October this year, is the second integrated resort to open at Pagcor Entertainment City which is being groomed as the country’s version of the Las Vegas gaming strip.
A partnership between the Melco group of Macau and the SM group’s Belle Corp., City of Dreams Manila will have a casino, hotel, retail and entertainment areas in its integrated resort. It will have six hotel towers, including the Crown Towers hotel, Nobu Hotel and Hyatt City of Dreams Manila, numerous specialty restaurants and bars, gaming facilities, a multi-level car park, as well as three separate entertainment venues.
Industry sources said Belle, for its part, would not increase its capital outlays for the project.
