Melco Resorts and Entertainment (Philippines) Corp says it will redeem up to PHP6 billion (US$112.79 million) of the outstanding PHP7.5 billion of corporate secured notes issued by its wholly-owned subsidiary, Melco Resorts Leisure (PHP) Corp. Melco Resorts Philippines announced the transaction to the Philippine Stock Exchange on Monday after a meeting of the board.
Melco Resorts Leisure issued PHP15 billion of senior notes at 5 percent on January 24, 2014. The paper was due to mature in January 2019. The current redemption will be funded from cash at hand.
Melco Resorts Philippines is a subsidiary of Asian casino operator Melco Resorts and Entertainment Ltd. Melco Resorts Philippines manages and operates the City of Dreams Manila casino resort (pictured), a project it developed in cooperation with Premium Leisure Corp. The latter is a subsidiary of Belle Corp, the gaming and real estate unit controlled by the Sy family – widely regarded as the wealthiest family in the Philippines.
Part of the gaming revenue or earnings from the City of Dreams Manila is paid directly to Belle Corp, which announced on Friday a net profit of about PHP920 million in the second quarter of this year – a 10.2-percent increase over the same period last year. Second-quarter gaming revenue at Belle Corp grew by 43.9 percent to about PHP1.07 billion.
Melco Resorts said in May this year it was in talks with Belle Corp to take an equity stake in the City of Dreams Manila. As recently as April, Belle Corp repeated its offer to develop additional facilities at the City of Dreams Manila, including non-gaming facilities and hotel accommodation.
Announcing its group results for the second quarter last week, Melco Resorts said net revenue at the City of Dreams Manila rose to US$173.9 million – up from US$176.2 million – and that adjusted earnings before interest, tax, amortisation and depreciation rose to US$87.3 million, up from US$62.8 million in the corresponding period one year earlier.
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Gross gaming revenue produced by the Philippine casino sector in the second quarter