Melco Resorts & Entertainment stated it’s unlikely Studio City will complete the planned Phase 2 by the 31 May, 2022, deadline. The group was forced to extend construction time due to disruptions from COVID-19.
According to the agreement Melco has with the Macau government, development of Phase 2 is required to end at the strict deadline, which is already an extension from a previously set date of 24 July, 2019. Initially, the group estimated it would take 32 months to develop the property.
According to the developer, the project would require close to $1.3bn to be completed. The group explained the decision, saying in a statement that even if it has “already made significant capital investments for the development for the remaining land of Studio City. We expect to require significant additional capital investments to complete the development”.
Studio City Finance LLC, a subsidiary of Studio City International Holdings Ltd, announced it will be seeking to raise $1bn by offering senior notes. The offering consists of two deadlines: $500m in aggregate principal amount due in 2025, and another $500m due in 2028. The offers come with 6% and 6.5% senior notes, respectively.
For Studio City, this fresh debt comes at the heels of previously announced private placements, for which the group aims to receive close to $500m.