Pansy Ho Chiu King is to remain managing director of MGM Grand Paradise SA for at least another 10 years, on condition that the entity wins a new Macau gaming concession under a recently-launched public tender, that is likely to see the winners start their term in January. Her stake in MGM Grand Paradise will also increase to 15 percent, from the current 10 percent, in order to comply with Macau’s amended gaming law.
The information on Ms Ho (pictured) was given in Sunday filings to the Hong Kong Stock Exchange by MGM China Holdings Ltd, which holds its current Macau rights – due to expire on December 31 – via MGM Grand Paradise. MGM China is a unit of United States-based MGM Resorts International.
MGM China said in its Sunday announcements that Ms Ho would receive US$8 million per year for the role.
The firm runs the MGM Macau and MGM Cotai resorts in the city. Ms Ho has served as managing director of MGM Grand Paradise since June 1, 2005, according to MGM China’s 2021 annual report, published in April.
Should a new public concession term be awarded to the business, she will be entitled to incentive payments based on MGM Grand Paradise’s average earnings before interest, taxes, depreciation and amortisation (EBITDA). Such incentives can be up to US$95 million over the whole period of a new concession.
MGM China also said that in order to comply with Macau’s revised gaming law and the tender regulation, it will inject MOP4.8 billion (US$594.0 million) into MGM Grand Paradise. According to Macau’s gaming law amendment, the minimum share capital requirement for any local casino concessionaire was increased to MOP5.0 billion, from the previous MOP200-million threshold.
As part of the deal, MGM Grand Paradise will issue and allot 4.07 million Class A shares and 730,000 Class B shares to MGM China, with the latter being then transferred to Ms Ho for MOP1.0. Following the transactions, MGM China will control 84.60 percent of MGM Grand Paradise’s voting rights. Ms Ho will have 15.0 percent of the voting rights, with MGM Resorts controlling 0.40 percent.
As MGM Grand Paradise managing director for the period of any new concession she has to “hold at least 15 percent of the share capital of MGM Grand Paradise to fulfil the requirements under the revised gaming law,” noted MGM China in its Sunday announcements.
Macau’s amended gaming law requires that at least “15 percent” of the gaming concession entity’s share capital has to be held by a “managing director” who is a Macau permanent resident.
MGM China Holdings Ltd’s interim loss attributable to its owners reached HKD2.40 billion (US$306.3 million) for the six months ended June 30, up from HKD1.73 billion in the prior-year period.
