Casino operator Melco Resorts & Entertainment Ltd said in a Wednesday press release that it will repurchase just above 40.37 million of its shares from its parent company, Melco International Development Ltd. Melco Resorts will pay a total consideration of US$169.8 million for the shares, it said.
The shares are held by Melco Leisure and Entertainment Group Ltd, a wholly-owned subsidiary of Hong Kong-listed Melco International.
Following the transaction and the cancellation of the repurchased shares, Melco International’s stake in Melco Resorts – controlled via Melco Leisure – will fall to 51.7 percent, from 53.1 percent, according to the announcement.
Melco Resorts is a company listed in the United States, being a subsidiary of Melco International. Lawrence Ho Yau Lung is chairman and chief executive of both Melco International and Melco Resorts.
Melco Resorts also said that a facility agreement with Melco International – in which Melco Resorts granted in March last year a US$250.0 million revolving loan facility to its parent – “will also be terminated following the settlement of all amounts due thereunder by Melco International”.
A draw down by Melco International in the amount of US$200 million had been “utilised on April 7” last year, according to previous filings from Melco Resorts.
On Wednesday, the company confirmed that a “repayment of US$200 million” by Melco International had been “made in January 2023”.
In addition to the privately-negotiated transaction, Melco Resorts stated that its previously-announced US$500-million share repurchase programme “remains in effect”. About US$412 million “remains available for future repurchases under the programme,” it added.
Earlier this month, Melco Resorts reported total operating revenue of US$1.35 billion for full-year 2022 versus US$2.01 billion in the prior year. Net loss attributable to Melco Resorts for 2022 was US$930.5 million, worse than the net loss of US$811.8 million recorded in the prior year.
In Macau, the Melco group operates the City of Dreams casino resort (pictured) and the Altira Macau casino hotel. It is also the majority owner of the Studio City casino resort, on Cotai. The firm also operates a chain of slot-machine parlours under the brand Mocha Clubs.
The group also has casino operations in the Philippines capital, via the City of Dreams Manila; and in Cyprus, where it currently runs some satellite casinos and is developing the City of Dreams Mediterranean casino resort, expected to open in the second quarter of this year.
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