Melco Crown Entertainment’s (Nasdaq: MPEL) timing on the issuing of USD200 million in new shares to pay for project debt at City of Dreams on Cotai is interesting.
Does it mean CoD is doing so well that MPEL is feeling more bullish on project payback dates? Or does it mean CoD is doing so poorly that the lenders have asked for an amendment on the covenants to get their USD1.75 billion back sharpish in case it ends in tears? It could be neither of the above, but things always happen for a reason, even if the reason isn’t always immediately obvious or immediately in the public domain.
Gross gaming revenue rose 3.1 percent year-on-year in Macau during July—possibly as a result of the so called ‘new venue bounce’ that has been a factor in every previous opening of a property there. Seasoned Chinese gamblers and novices alike tend to try their luck in a new venue, on the basis that spiritually speaking it has a clean slate when it comes to luck and good fortune.
The July performance reduced the year-on-year market wide decline in Macau’s GGR in the first seven months of 2009 to 10 percent, according to the Portuguese-language news agency Lusa.
The New York-listed but Hong Kong-based MPEL is offering 37.5 million American Depositary Shares (ADS) that some analysts have estimated represents a seven percent stake in the business. The company said the allocation of shares for sale might be expanded depending on demand.
CoD, with 516 gaming tables, opened on 1st June on Macau’s Cotai Strip. The first phase of the scheme includes a Hard Rock Hotel and Casino, a Grand Hyatt Hotel and a Crown Hotel, as well as a multimedia theatre and shops.
