MGM Grand Macau, the 50:50 joint venture between MGM MIRAGE and Pansy Ho, will seek to raise cash via a Hong Kong listing by mid year 2010 said Jim Murren, Chairman and Chief Executive of MGM MIRAGE yesterday.
The listing will probably be via a unit of the resort’s local operating company MGM Grand Paradise.
“We want to go public by mid-year, though it could bleed into the third quarter–though I guess that’s still mid-year,” Mr Murren told analysts during an earnings conference call to discuss MGM MIRAGE’s fourth quarter 2009 results.
MGM MIRAGE’s Q4 2009 figures showed MGM Grand Macau significantly boosted its operating income in the fourth quarter of 2009 compared to a year earlier.
It posted US$22 million operating income in Q4 2009 compared to an operating loss of US$2 million in the equivalent period in 2008.
The challenge in 2010 is to build MGM Grand Macau’s share of the Macau gambling market gross from the 9% bottom-of-the-class performance seen in 2009.
Mr Murren stated during the conference call that MGM MIRAGE is the strongest performer in high-end baccarat in Las Vegas. Baccarat is the game of choice for VIP Asian players in Macau and in Las Vegas.
“We have more people in town [Las Vegas] than ever before during Chinese New Year. Baccarat been very strong and we are the main player in baccarat- especially at the high end.”
Mr Murren added that even ‘stripping out’ the impact of Aria–the company’s high end offering at its new CityCenter complex in Las Vegas–company revenue performance during Chinese New Year was up on the equivalent period in 2009.
“I can’t be too specific, though I know you’d like me to be,” he told analysts.
“Even stripping out Aria, we know it (high end baccarat performance) is up year over year. When you include Aria we doubled the baccarat numbers.”
Mr Murren attributed that to the company’s portfolio of five luxury properties in Las Vegas. He said Asian high rollers were more likely to be kept interested and gambling for up to a week during the Lunar New Year holiday.
That apparent strength among ethnic Asian baccarat high rollers in Las Vegas hasn’t so far translated into a powerful performance in the Macau baccarat market. That’s probably because MGM Grand Macau, in common with the other Macau operators with foreign ownership interests, was rather a slow-starter in establishing relationships with local gambling agents. The agents are the main conduit for supplying VIPs to the Macau market.
Other figures released by MGM MIRAGE on its Macau interest yesterday showed depreciation expenses on MGM Grand Macau rose 20.8% to US$24 million in Q4 ’09 from US$19 million a year earlier.
MGM Grand Macau’s figures were not broken down in detail in MGM MIRAGE’s results release, but were included under the heading ‘unconsolidated affiliates’. By that metric, MGM Grand Macau accounted for 88% of MGM MIRAGE’s US$27 million earnings from unconsolidated affiliates in Q4 2009.
Pansy Ho, a daughter of Macau’s former casino monopolist Dr Stanley Ho owns the other 50% of MGM Grand Macau.
