Melco International Development Ltd says it generated nearly HKD770.8 million (US$98.2 million) in net proceeds after expenses from its recent share rights sale.
Melco International is the Hong Kong-listed parent of global casino operator and developer Melco Resorts & Entertainment Ltd. Melco Resorts runs casinos in Macau, one in the Philippine capital, gaming venues in the Republic of Cyprus, and will this year launch a casino venue in a complex in Colombo, the Sri Lankan capital.
Just over half of the net amount – i.e., HKD389.9 million – from the Melco International rights issue was set off against money owed by the company under a shareholder loan arrangement agreed on April 24, according to a Monday filing. Under it, Melco International had been loaned HKD451.8 million by associates of its chairman and chief executive, Lawrence Ho Yau Lung (pictured in a file photo).
That unsecured loan carried 11 percent annual interest, payable every two months, with a maturity of October 24 next year, and had been made available due to “the limited availability of debt financing options for the company in the current market environment,” Melco International had said in the May 26 prospectus for the rights issue.
After taking account of the set off from the shareholder loan, Melco International said in its Monday filing that a balance of just over HKD380.8 million was available from the rights issue. That will be used to prepay a portion of principal amounts outstanding and interest payable under Melco International’s 2021 credit facilities.
According to previous filings, the 2021 credit facilities are for a principal amount of US$1-billion for a five-year term, agreed with lenders in June 2021.
The just-completed Melco International rights issue was for up to 758,341,877 new shares offered to existing shareholders. About 94.4 percent of the rights shares available were allotted, stated the company.
They were offered on the basis of one new rights share for every two existing shares at a subscription price of HKD1.0286 per share, according to the May 26 prospectus.
