Louis XIII Holdings has agreed to terms with a mainland China bank for a HK$3 billion loan (US$385 million) to fund construction of a luxury hotel, presumably with a casino, on Cotai.
The six-year term loan, the subject of an offer letter from the unnamed bank, is described as “good news” by investment brokerage Union Gaming Research Macau which covers the Hong Kong-listed company’s stock (0577.HK).
“As we’ve noted on numerous occasions, we view the announcement of the debt deal as the best indicator—short of a comfort letter—that the project should ultimately receive an allocation of table games at the appropriate time,” the firm said today in a note to investors.
The balance of the project’s total funding, pegged at HK$6.4 billion ($820 million) was secured last year through a sale of new shares and convertible bonds.
The resort is slated to open in 2016 at the far south end of the Cotai Strip with 246 suites and villas, an invitation-only atelier and a branch of France’s famed L’Ambrosie, which will open as Macau’s only Michelin 3-star restaurant.
The 66 VIP and high-limit cash tables planned for the casino portion will require an operating agreement of some form with one of the city’s six gaming concessionaires similar to the numerous third-party-promoted casinos that operate as sub-licensees of SJM Holdings. Progress on that front has not been made public, but UGRM is comfortable that gaming will be part of the mix.
“We think that as part of its due diligence the mainland bank is likely to have sought requisite assurances on the project from the government,” the firm said.
