Jun 11, 2020 Newsdesk Latest News, Macau, Top of the deck  
Macau casino operator MGM China Holdings Ltd says it generated operating revenues of HKD122.5 million (US$15.8 million) in April, and incurred cash operating expenses of approximately HKD346.1 million. Such expenses excluded rent, interest, variable gaming taxes and expected capital expenditures, said the firm in a Wednesday filing.
The company said that due to the Covid-19 pandemic its expenses were “significantly in excess of amounts being earned” at both of the group’s properties in Macau. MGM China, controlled by U.S.-based casino operator MGM Resorts International, runs MGM Macau on the city’s peninsula and MGM Cotai (pictured) in the Cotai casino district.
In its latest filing, MGM China estimated its monthly cash outflow at approximately HKD505.7 million. This included: run-rate operating costs of approximately HKD318.8 million; development and maintenance capital expenditures of about HKD107.2 million; and interest expense of approximately HKD79.7 million.
The company also said that its estimated capital expenditure included planned development that would “strengthen” the group’s “position in the premium-mass segment,” including the development of South Tower suites at MGM Cotai.
The April results were announced in conjunction with a proposal to issue U.S.-denominated senior notes due 2025, to professional investors. If the note offering goes ahead, the company said it intends to use the net proceeds “to repay a portion of the amounts outstanding under its existing revolving credit facility and for general corporate purposes.”
MGM China said in Wednesday’s document that it had “undertaken a series of actions to minimise its expenses.” These included reducing or deferring capital expenditures that were planned for the second quarter of 2020 and reducing payroll expenses, namely by limiting staff on site, implementing a hiring freeze and introducing voluntary unpaid leave.
“Given the uncertain nature of these circumstances, the ultimate impact of the Covid-19 pandemic on MGM China’s results of operations, cash flows and financial condition cannot be reasonably estimated at this time,” said the company.
In its latest filing, MGM China said that – assuming an offering size of US$500.0 million – it believed the group would have liquidity to support over 22 months of operations in a zero-revenue environment.
“The directors … consider that the proposed notes issue represents a good opportunity to raise additional funds for the company,” it added.
The casino operator said it had cash and cash equivalents of just above HKD2.05 billion as of May 31. The firm said it also had available capacity of HKD5.24 billion under its revolving credit facilities. In April, the company amended the financial covenants under its revolving credit facility, namely the permitted leverage ratio and interest coverage ratio.
In late May, MGM China said it had been granted a new HKD2.34-billion revolving credit facility, with a final maturity date on May 15, 2024. The financial covenants under the second credit facility are not effective until September 30, 2021.
The casino operator said additionally that it had developed “recovery strategies” to attract customers once travel restrictions are lifted to enable visitors to return to Macau in meaningful numbers.
It emerged earlier this month that MGM China would be making changes to its top-level management, following the retirement of its long-time chief executive Grant Bowie on May 31, according to an internal memo seen by GGRAsia.
May 30, 2023
May 25, 2023
Jun 01, 2023
Jun 01, 2023
Jun 01, 2023
Casino equipment maker Sega Sammy Creation Inc is tweaking its market approach in the land-based segment, in terms of manufacturing and sales, says Naoki Kameda (pictured, left), the firm’s...Jun 01, 2023
Casino equipment maker Sega Sammy Creation Inc is tweaking...Jun 01, 2023
The iGaming segment in Asia “has grown rapidly” since...May 31, 2023
Showing slot machine players – via animations on the...May 31, 2023
Macau stocks in likelihood “have been punished too much...May 31, 2023
There are foreign companies still interested in investing...May 31, 2023
Thailand could pass the necessary enabling legislation for...May 30, 2023
China will remain a key market for Asian gaming...May 30, 2023
Alejandro Tengco (pictured in a file photo), chairman and...May 30, 2023
There are “plenty of reasons” for the global gaming...May 30, 2023
Gaming equipment provider International Game Technology Plc...May 30, 2023
The Global Gaming Expo (G2E) Asia 2023 Special Edition:...May 29, 2023
Austria-based gaming equipment maker and operator Novomatic...May 25, 2023
Sports betting and online casino operating platform...May 24, 2023
The business performance in Asia of gaming content and...May 18, 2023
The organisers of Global Gaming Expo (G2E) Asia 2023...May 17, 2023
Gaming content and equipment supplier Light & Wonder...May 16, 2023
Casino equipment maker Sega Sammy Creation Inc is to...May 09, 2023
Casino slot machine and digital gaming content provider...May 05, 2023
The Global Gaming Expo (G2E) Asia event in Singapore is the...May 04, 2023
An adviser to a Thailand parliamentary committee mulling...(Click here for more)
”We’re interested [in entering Thailand], we’re looking… but it’s early days”
Robert Goldstein
Chairman and chief executive of casino operator Las Vegas Sands