GGRAsia – MGM China no restructure plans amid sell off plea to parent

MGM China no restructure plans amid sell off plea to parent

Jan 08, 2021 Newsdesk Latest News, Macau, Top of the deck, World

Macau casino operator MGM China Holdings Ltd issued on Friday a filing to the Hong Kong Stock Exchange, saying it has “no plans” for “restructuring”.

The firm, 56-percent owned by United States-based casino group MGM Resorts International, said its statement was in the light of a letter on Wednesday by investment firm Snow Lake Capital (HK) Ltd, calling for MGM Resorts to sell 20 percent of MGM China to a “leading Chinese consumer Internet or travel and leisure company”.

Snow Lake Capital, which operates as an investment manager, owns roughly 7.5 percent of MGM China. The casino firm runs the MGM Macau casino resort on Macau peninsula, and the MGM Cotai property in the city’s Cotai district.

The Macau casino firm said in its Friday filing its board was “aware of an open letter issued by Snow Lake Capital, an institutional investor and a shareholder of the company, to the board of directors of MGM Resorts International, the company’s controlling shareholder, on 6 January 2021, making recommendations on the shareholding structure and future development of the company”.

MGM China added: “The board confirms that, as at the date of this announcement, the company has no plans of restructuring.”

It further noted: “The board will continue to communicate with the company’s shareholders and operate the company in the best interests of its shareholders and stakeholders, enhancing shareholder value and performance of the company.”

In its own statement on Wednesday, MGM Resorts said it remained “committed to Macau,” adding that it would “continue to take actions that are in the best interests of its shareholders and stakeholders.”

A Monday note from brokerage Sanford C. Bernstein Ltd said that if a US$11 billion-plus deal went through for MGM Resorts to transform its business model by acquiring online betting conglomerate Entain Plc, in the long term it could lead to the MGM parent divesting its interest in MGM China.