Macau concessionaire MGM China has terminated a US$750 million revolving loan facility provided by parent company MGM Resorts International in late 2022, arguing that it no longer needs the money.
In a Wednesday filing, the company said it had executed a letter with MGM Resorts in which the two parties mutually agreed to the voluntary cancellation of the entire US$750 million unutilized commitment under the facility agreement, with no party liable to the other.
MGM China explained that the facility – agreed to in November 2022 before Macau’s international borders reopened – had been intended to meet the then future working capital and funding needs of the company. However, its revenue “recorded a substantial increase in 2023, which was underpinned by a significant recovery in the markets the Company operates in following the easing of COVID-19 travel restrictions to Macau which began in late 2022. The Company is thus in a position where drawing on the facility provided by MGM Resorts is not commercially necessary.”
Buoyed by the addition of 200 new gaming tables under its current 10-year concession and with significant investment made into enhancing its Macau gaming floors, MGM China recently announced all-time record Adjusted Property EBITDAR for both 4Q23 and FY23 on net revenues of US$983 million – up 462% year-on-year and 35% higher than in 4Q19.
The company also topped 20% Macau market share in January for the first time in its history.
MGM Resorts currently holds a 56% stake in MGM China.
