Melco Crown unit hikes capital to P5.9 B

MANILA, Philippines - The local unit of Macau-based casino giant Melco Crown Entertainment Ltd. has secured the approval of corporate regulators for an increase in its capitalization.

The development brings the casino giant a step closer to raising fresh capital for its $1.3-billion casino complex in Manila.

In a disclosure, Melco Crown (Philippines) Resorts Corp. said the Securities and Exchange Commission has approved the amendment of the articles of incorporation to increase the authorized capital stock from P900 million to P5.9 billion.

Last week, Melco Philippines announced its plan to conduct an international roadshow as part of its $400-million share sale that will broaden the company’s investor base and bankroll the construction of an integrated resort and casino complex.

The share sale will involve MCE (Philippines) Investments Ltd.’s sale of up to 1.2 billion shares it holds in Melco Crown Philippines.

MCE Philippines will then subscribe to the same number of shares that will be issued by Melco Crown Philippines.

The increased capital will also allow Melco Crown Philippines to sell 2.85 billion common shares to MCE Philippines worth P1 apiece for a total transaction value of P2.85 billion.

Early this week, Melco Crown Philippines raised P2.16 billion in fresh capital as it sold all of its 150.43 million treasury shares at P14.20 each. Treasury stocks are company-owned shares, which might have come from a buyback from shareholders or it might have never been sold to the public.

Meanwhile, Melco Crown Philippines said it plans to further amend its articles of incorporation to allow it to own land.

“The company currently does not own land, and does not intend to do so for now, as it is disqualified by the Philippine Constitution given that its foreign ownership is in excess of 40 percent,” the casino firm said.

The $1.3-billion, 920-room Belle Grande Manila Bay casino and resort complex, a joint venture with the SM Group’s upscale leisure developer and gaming unit Belle Corp., will start operations next year.

Belle and Melco Crown will be the second casino operator in Entertainment City, following the $1.2-billion Solaire Resort and Casino of port magnate Enrique Razon that opened in March last year.

The government is grooming the Philippine Amusement and Gaming Corp.’s (Pagcor) 120-hectare Entertainment City along Manila Bay as a competitor of Las Vegas, Singapore and Macau gaming hubs.

Belle Grande Manila Bay will be Melco Crown’s first casino outside Macau where it operates the City of Dreams and Altira Macau casinos. The company is developing its third casino, Studio City, which is slated for opening in 2015.

The project is the first gaming venture of the Sy family, whose holding company SM Investments Corp. is involved in five core businesses – retail merchandising, mall operations, property, banking and hotel and leisure.