GGRAsia – Rights issue by Macau casino op SJM oversubscribed

Rights issue by Macau casino op SJM oversubscribed

Sep 22, 2022 Newsdesk Latest News, Macau, Top of the deck

A rights issue that had been launched at the end of August by Macau-based casino operator SJM Holdings Ltd has been oversubscribed, said the firm in a Wednesday filing.

SJM Holdings received a total of 304 valid acceptances in respect of 1.33 billion rights shares allotted under the rights issue, representing approximately 93.8 percent of the total number of rights shares available. In addition, the firm received a total of 189 valid applications for circa 2.51 billion excess rights shares, representing approximately 176.7 percent of the total number of rights shares available for subscription.

Thus, the group received in aggregate a total of 493 valid acceptances and applications in respect of approximately 3.84 billion rights shares, representing approximately 270.5 percent of the total number of rights shares available for subscription.

A factor was that some directors of the group had subscribed to excess rights shares.

SJM Holdings had initiated the whole exercise on the basis of one rights share for every four existing shares held as of August 29, 2022, at a subscription price of HKD2.08 (US$0.26) per rights share. The rights issue became unconditional at 4pm on September 15.

The firm had said in August, when it announced the rights issue, it expected to raise net proceeds of nearly HKD2.94 billion via the operation. “The company intends to apply approximately HKD2.70 billion to fund the increase in SJM Resorts SA’s share capital and the balance for the general working capital of the group,” SJM Holdings said at the time.

It added that the exercise was “part of the increase in share capital which SJM Resorts is required to have to pre-qualify for the tender process by which the Macau government may grant SJM Resorts a 10-year gaming concession commencing on 1 January 2023”.

According to Macau’s amended gaming law, a casino operator would have to set aside MOP5 billion (US$618.4 million) as a liquidity reserve as part of future concession arrangements. Such amount is part of requirements for any would-be bidder for a fresh public tender for Macau gaming rights.

A public tender for up to six, 10-year concessions in the city is currently taking place. Proposal submission ended on September 14. SJM Resorts is among the seven accepted candidates.

The group’s shares ended trading at HKD2.72 apiece on Thursday, according to Hong Kong Stock Exchange data.

Dealing in the rights shares, in their fully-paid form, is due to be authorised from Friday (September 23) at 9am.

In the same Wednesday filing, SJM Holdings gave an update on an exercise regarding some convertible bonds that had been issued on June 22, by Champion Path Global Ltd, a wholly-owned unit of SJM Holdings, with the bonds guaranteed by the latter.

Under the arrangement, a total of 468,304,668 new shares were to be allotted and issued upon full exercise of the conversion rights attaching to the convertible bonds.

The latest filing said the conversion price on the bonds had been reduced by 7.1 percent, to HKD3.78 per conversion share, from HKD4.07.

“Based on the total outstanding amount of the convertible bonds of HKD1,906,000,000 at the date of this announcement and the adjusted conversion price, an additional 35,928,136 shares will be issued upon conversion of all the outstanding convertible bonds,” said the group.