Melco Crown proposes Hong Kong delisting
Macau-based gaming operator Melco Crown Entertainment Ltd wants to have its shares “delisted” – i.e. removed – from the Hong Kong Stock Exchange “for reasons of cost and utility”. An application for the voluntary withdrawal was submitted on Friday, the company said after market hours.
“We intend to retain the primary listing of ADSs [American depository shares] on the Nasdaq following the proposed [Hong Kong] delisting,” the firm said in a filing.
The exact timing of the operation has not been confirmed.
The firm’s Hong Kong stocks posted a price drop of 35 percent during 2014, ending the year at HKD65.75 (US$8.48). On Friday, Melco Crown’s shares dropped by 2.7 percent in Hong Kong trading.
In Macau, the firm is expanding the City of Dreams casino resort (pictured) in Cotai and building Studio City, due to open in mid-2015. Melco Crown is also a partner in City of Dreams Manila, a project that had a soft opening last month.
After the delisting, existing Melco Crown shareholders will have the option of either still keeping the shares or converting them into ADSs, which will continue to be traded on the Nasdaq in the United States.
Melco Crown said one of the reasons for the proposed delisting was the lack of “appropriate opportunities to raise additional equity in Hong Kong” and the “very limited” volume of trading in its shares on that exchange.
The firm added that maintaining the listing of the shares in Hong Kong “requires additional ongoing regulatory compliance obligations and such requirements involve significant additional costs and administrative burden”.
The delisting still needs to be approved by the company’s shareholders in an extraordinary general meeting. It also needs approval from the exchange’s listing committee.
All the six Macau casino concessionaires and sub-concessionaires are currently listed on the Hong Kong Stock Exchange. Only Melco Crown has a dual listing.
Melco Crown’s ADSs were listed on the Nasdaq Global Market in December 2006 and were upgraded to be traded on the Nasdaq Global Select Market in January 2009. Each ADS represents three shares.
In December 2011, the company completed a dual primary listing in Hong Kong and listed its shares on the main board of the stock exchange by way of introduction.
Last month, Melco Crown was dropped from the Nasdaq Q-50 Index due to its poor stock performance.
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