The opening of Macau casino operator SJM Holdings Ltd’s Cotai casino resort, Grand Lisboa Palace (pictured), could be further delayed, this time to the third quarter this year, due to pending licensing process that required another “four to eight weeks”, suggested banking group Morgan Stanley, in a May 27 memo.
SJM Holdings mentioned opening “during the first half of 2021”, in its first-quarter results highlights filed to the Hong Kong bourse in early May. The HKD39-billion (US$5 billion) Cotai scheme is to house a Grand Lisboa Palace Hotel, a “Palazzo Versace” -branded hotel ,and a “Karl Lagerfeld” -branded hotel, along with gaming and other non-gaming facilities.
“We believe that Grand Lisboa Palace opening could be further delayed (now third quarter 2021),” wrote Morgan Stanley Asia Ltd analysts Praveen Choudhary and Gareth Leung.
“It is waiting for occupancy permit and approval/licences from the Macao Government Tourism Office (MGTO) and the Gaming Inspection and Coordination Bureau (DICJ), which could take another four to eight weeks as expected by management,” the analysts added, referring second to the local gaming regulator.
The casino operator planned to launch the Cotai casino resort first with “260 mass tables” and one hotel tower with 650 rooms, the analysts suggested. The Cotai property might not see retail rental business until “end-2021 or 2022”, and launch “44 VIP tables” in 2022 when the Versace-branded hotel opens, the Morgan Stanley team also noted.
Pre-opening expenses of approximately HKD200 million per quarter were expected to continue for the new Cotai scheme, the Morgan Stanley analysts also said.
The casino operator previously flagged it had a HKD$25 billion-syndicated credit facility to support its new Cotai scheme. The firm had plans to refinance that syndicated loan with a new one, the Morgan Stanley analysts suggested in their memo.
“SJM plans to refinance its HKD$25-billion syndicated loan with a new one of size less than HK$20 billion and tenor at approximately six years, potentially at a lower rate. The company expects to close it by early third quarter,” the Morgan Stanley team wrote.
SJM Holdings announced in May that it was raising about US$198.4 million via notes denominated respectively in Hong Kong dollars and Macau’s own currency, the pataca (MOP).
About “90 percent” of the net proceeds from that exercise – estimated at HKD1.24 billion and MOP298 million respectively – would be used to refinance the firm’s syndicated credit facilities, with the balance to go to “general corporate purposes”, the firm said at the time.
