Hong Kong-listed Melco International Development Ltd, the parent of casino firm Melco Resorts & Entertainment Ltd, has announced plans to raise up to HKD781.1 million (US$100.7 million) through a rights issue of up to 759,350,377 new shares offered to existing shareholders.
The firm said in a stock exchange filing on Friday that the proceeds would be used to repay part of an outstanding credit facility, which matures later this year, alongside associated interest payments.
The Melco brand is controlled by entrepreneur Lawrence Ho Yau Lung (pictured in a file photo).
The rights shares will be offered on the basis of one new rights share for every two existing shares at a subscription price of HKD1.0286 per share.
Explaining the rationale behind the fundraising, the firm stated: “In light of the company’s current capital structure, the board considers that it is appropriate to raise new capital in the form of equity to pay down a portion of the company’s existing debt, strengthen its balance sheet and enhance the capital structure for long-term development.”
Melco International said it had “explored various fund-raising options”, but eventually concluded that “a rights issue and open offer will provide an opportunity for all shareholders to participate in the future development of the company on equal terms and maintain their shareholdings.”
It added: “A rights issue will also provide qualifying shareholders flexibility to sell their entitlements on the open market for cash realisation.”
Melco International stated in its Friday filing that the firm’s total assets stood at approximately HKD84.75 billion at the end of last year, while outstanding interest-bearing borrowings – net of deferred financing costs and debt modification adjustments – amounted to about HKD60.69 billion.
This, it noted, resulted in a gearing ratio of 71.6 percent, a significant increase from 42.4 percent as of June 30, 2019.
Melco International’s main operating unit, Melco Resorts, ended full-year 2024 with total operating revenues of nearly US$4.64 billion, up 22.9 percent year-on-year.
Melco Resorts booked, for the 12 months, a profit attributable to the owners of US$43.5 million, compared to a US$326.9-million loss in 2023.
