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Crown acquisition green lighted by Beijing

Thu, Jun 27, 2:17pm by Staff Writer

Melco Resorts & Entertainment boss Lawrence Ho has revealed he was given the green light by Beijing before proceeding with the acquisition of a 19.99 per cent stake in Australia’s Crown Resorts.

Asgam is reporting the deal, which will see Melco acquire 145.5 million shares from James Packer’s CPH Crown Holdings for a total consideration of US$1.22 billion came less than three years after 19 Crown Resorts employees were arrested in mainland China for promoting gambling.

At the time, the two companies were still partners in Macau and the Philippines under the Melco-Crown brand.

In an interview expected to appear in the July issue of Inside Asian Gaming, Melco’s Chairman and CEO confirms he spoke with both the Chinese and Macau governments before buying into the Australian casino operator.

“I have regular dialogue [with Beijing] and I’ve had my courtesy talk, and Beijing and Macau were supportive,” he said.

“At the same time, they understand that as a company that’s listed in the US, we’re obligated to do our own thing. But even the couple of quiet talks we had were supportive.”

On the topic of government approvals, Ho also explained that he has considered combining the listing of US-listed Melco Resorts and its parent company Melco International Development Ltd, but had resisted ahead of Macau’s looming licence re-tendering.

“We’ve looked at that,” he said, “but especially with licence renewal on the horizon, the government likes that Melco International controls Melco Resorts and that Melco International is a Hong Kong-listed company that I control. But we’ll look at that in the future,” he said.

MBS wants another $6 million in loans

Marina Bay Sands is asking lenders for another $6 billion in financing for its expansion plans, after borrowing $3.71 billion from 28 lenders seven years ago.

Marina Bay’s parent company, Las Vegas Sands still owes $2.91 billion for money it was given in 2012 and receiving more loans won’t come easy.

Local financial institutions will most likely be hesitant to step forward with one bank telling Reuters, “the borrower has not raised such a size before and it is also unprecedented for the market in Singapore.”

New lenders most likely will not be willing to jump in, which means LVS will have to turn to existing lenders if it wants the money.

Another banker told Reuters, “I don’t expect a significant number of new lenders joining the deal because the borrower has already combed the market in the past.”

LVS, as does virtually every major casino operator, wants to be awarded one of the three initial casino licences in Japan.

It has been pointed out that the company’s business model in Singapore works well and could be adopted for Japan’s integrated resorts.

LVS has been hoping its continued performance in Singapore will show the Japanese government that, despite carrying massive debt and possibly influencing legal decisions, it deserves one of the licences.

LVS has the largest chunk of the US casino market by market value.

However, its revenue is dependent significantly on how the company’s Asian venues perform.

LVS saw EBITDA of $1.45 billion in the first quarter of the year, of which Singapore provided 29 per cent.

That performance has allowed Moody’s Investors Service to continue to give the company a credit rating of Ba1, a rating it has held since 2015. The rating could be better, but certain bonds held by LVS “are judged to have speculative elements and are subject to substantial credit risk.

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