Studio City offers private placements to increase equity
The operator of Macau’s Studio City, Studio City International Holdings Ltd (SCIHL), announced a series of private offers in hopes of obtaining somewhere between $450m and $500m in proceeds. The firm will be selling its Class A ordinary shares for $3.89 per share to its existing shareholders.
The plan is to increase equity for SCIHL to withstand the global lockdowns. It could potentially further grow the number of shares Melco Resorts and Entertainment Ltd has in the casino.
Melco is the largest shareholder with more than 60% in Studio City. The group put in a statement that it aims to “purchase all the Class A Shares offered to it in the Class A Private Placements and, in addition, has indicated it will purchase the maximum number of unsubscribed securities available for its purchase under the terms of the private placements to the extent offered to it by SCIHL”.
Another shareholder for the casino, New Cotai Holdings, has 36% of stakes. The group hasn’t yet announced if it aims to purchase the newly offered shares, but SCHIL is offering New Cotai “a right to acquire an additional participation interest in MSC Cotai at a price equivalent to the per Class A share price of the Class A private placements”.
MSC Cotai is a subsidiary to SCIHL and holds the firm’s assets and liabilities.
Completion of the offering hinges on market conditions and investor interest, and proceeds will be used to redeem senior secured notes issued in 2016 and due in 2021, as well as fund Phase Two for Studio City.
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