GGRAsia – Studio City Intl note offering, secures Melco financing

Studio City Intl note offering, secures Melco financing

Feb 08, 2022 Newsdesk Latest News, Macau, Top of the deck

Studio City International Holdings Ltd, promoter of the Studio City casino resort in Macau, plans to offer senior secured notes, with the net proceeds partially to fund the capital cost of the under-construction Phase 2 of Studio City, and the rest being used for general corporate purposes.

The note offering will be conducted by its subsidiary Studio City Co Ltd, it said in a Monday announcement. The interest rate and other terms of the notes will be determined at the time of pricing of the offering, it added.

In a separate release, Studio City International stated that it has entered into subscription agreements for a private placement offering of US$300 million, priced at US$0.75 per share. It announced that its existing shareholders, which hold in aggregate over 99 percent of the outstanding shares, have subscribed to the offering.

It includes a commitment from casino operator Melco Resorts and Entertainment Ltd to purchase just above 220 million shares of Studio City International, in an aggregate amount of US$165.1 million.

The share purchase will be done via Melco Resorts’ unit MCO Cotai Investments Ltd. Studio City International is an indirect wholly-owned subsidiary of Melco Resorts.

MCO Cotai held class A shares representing approximately 54.7 percent of the issued shares of Studio City International and – upon completion of the private placements – is expected to hold approximately 54.9 percent of the Studio City promoter, according to a separate Monday filing from the Melco group.

As part of the private placements, New Cotai LLC is purchasing about 93.8 million shares of Studio City International, at an aggregate price of US$70.4 million; and Silver Point Capital LP has agreed to acquire just above 55.7 million shares of Studio City International, for a total amount of US$41.8 million.

Following the transactions, New Cotai’s stake in Studio City International will increase to 23.4 percent, from 23.3 percent; while Silver Point’s holding will remain at 13.9 percent.

The expansion of Studio City is to feature Macau’s first W Hotel, scheduled to open in December 2022, along with the rest of the Phase 2 of the property.

Phase 2 of the casino resort will have approximately 250,000 square metres (2.69 million sq. feet) of gross floor area. Included will be a “retail complex” of over 21,000 sq. ms and over 2,300 sq. ms of gaming space, according to company information issued in November.