Asian casino operator Melco Crown Entertainment Ltd has requested more time from the Macau government to complete development work on the land concession where Studio City is located. Melco Crown, chaired by gaming entrepreneur Lawrence Ho Yau Lung, is the 60-percent owner of Studio City (pictured).
The terms of the land concession contract for Studio City require the company to “fully develop the land on which the property is located by July 24, 2018”, Nasdaq-listed Melco Crown said in filing to the U.S. Securities and Exchange Commission on December 14.
“In October 2016, we filed an application with the Macau government requesting an extension of the development period for the additional development on the land on which Studio City is located,” Melco Crown stated. “The application is currently under review by the Macau government,” it added.
Such work is expected to include “a hotel and related amenities,” the company said in the filing.
On November 29 Melco Crown’s Mr Ho told Hong Kong media that the firm was still working on the plans for the development of the “remaining one-third” of the land plot in Cotai on which Studio City was built.
A spokesperson from Melco Crown told GGRAsia earlier this month that the company is in discussions with the Macau government on how additional development at the Studio City site “can align with its [the government's] economic diversification strategy and overall development objectives for Macau”.
The mass-market-focused US$3.2-billion Studio City opened in October 2015 without any VIP gambling rooms. VIP operations – including both junket and premium direct VIP offerings – were introduced at Studio City in early November 2016.
In its third-quarter results, Melco Crown noted that its trading improvement in the period has been bolstered by improved performance at Studio City.
The firm has also stated in the quarterly results that “the ramp-up of Studio City operations must be significantly accelerated by March 31, 2017,” in order to meet financial condition requirements under the Studio City loan agreement.
Studio City Co Ltd – a company in which Melco Crown has a 60-percent stake – is the borrower under a US$1.4-billion senior secured facility for construction of Studio City. Studio City Co completed on December 1 an offering of new notes due 2019 and 2021, raising an aggregate of US$1.2 billion to be used to repay the loan.
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Japanese brokerage Nomura