GGRAsia – SJM Hldgs, Macau govt nod capital increase for SJM Resorts

SJM Hldgs, Macau govt nod capital increase for SJM Resorts

Aug 29, 2022 Newsdesk Latest News, Macau, Top of the deck

SJM Resorts Ltd, the entity that holds a current Macau gaming concession on behalf of parent SJM Holdings Ltd, has received the necessary approvals from, respectively, the parent firm and the Macau government, to go ahead with a significant increase of its share capital. That is for the firm to qualify for an ongoing public tender for fresh gaming rights in Macau.

SJM Holdings said in a filing issued on Friday that its shareholders had approved – via an extraordinary general meeting – the proposal to increase the number of ‘Type B’ shares of SJM Resorts. The move had been first announced by the parent firm on August 9.

The Friday filing from SJM Holdings stated that the proposed changes in the capital structure of its subsidiary had received the necessary approvals by the Macau government on the previous day (August 25).

The SJM group operates a number of casinos in Macau, including the Grand Lisboa property (pictured in a file photo) on the peninsula.

The overall change in capital structure aims to increase SJM Resorts’ share capital by nearly 1,567 percent, to MOP5.0 billion (US$618.4 million) from MOP300 million, “to be able to qualify for applying for [a] new gaming concession” under the city’s recently-opened public tender, said its parent SJM Holdings Ltd in its Friday filing.

In order partially to support the capital increase for SJM Resorts, SJM Holdings recently announced a rights issue on the basis of one rights share for every four existing shares. The exercise is to be concluded by mid-September, at a subscription price of HKD2.08 (US$0.265) per rights share. The casino operator said it expected to raise net proceeds of nearly HKD2.94 billion from the exercise.

According to Macau’s gaming law amendment, passed in June, the minimum share capital requirement for any local casino concessionaire was increased to MOP5.0 billion, from the previous MOP200-million threshold.

As part of the capital increase, SJM Resorts is increasing the portion of its ‘Type B’ shares from 10 percent to 15 percent. That particular change was approved on Friday by the shareholders of SJM Holdings.

Macau’s amended gaming law requires that at least “15 percent” of the gaming concession entity’s share capital has to be held by a “managing director” who is a Macau permanent resident.

Prior to the latest capital increase, SJM Resorts’ registered MOP300-million capital consisted of 2,700,000 ‘Type A’ shares – representing 90 percent of the issued share capital – and 300,000 ‘Type B’ shares – representing 10 percent of the issued share capital.

All the new ‘Type B’ shares are to be issued to the managing director of SJM Resorts in the person’s capacity as such, “at par payable in cash, solely for the purpose of maintaining such managing director’s shareholding in SJM Resorts for compliance with the applicable law”, according to SJM Holdings.

SJM Resorts’ current Macau concession will expire on December 31, having been extended – in common with the other five existing Macau rights holders – from a June 26 expiry date, while the Macau government organised the fresh public tender process.

There is a September 14 submission deadline for Macau’s fresh public tender, with the authorities aiming to have the new 10-year concessions operational by January. Up to six new concessions will be permitted under the updated regulatory framework.