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Studio City takes a punt on US capital market
Posted on Wednesday, 10 October 2018 10:53
Studio City International Holdings, a Macau’s casino division of Hong Kong-listed Melco International Development, is aiming to raise as much as USD 417.00 million when it receives permission to trade on the New York Stock Exchange. The Cayman Islands-incorporated vehicle is selling 28.75 million American depository shares (ADS) at USD 10.50 and USD 12.50 apiece, and has granted underwriters an overallotment option for an additional 4.32 million units. Credit Suisse, Deutsche Bank and Morgan Stanley are handling the initial public offering of these US dollar-denominated securities representing four class A ordinary shares. Incorporated in the British Virgin Islands in 2000 as Cyber One Agents, the business was granted a land concession by Macau for the development of a cinematically-themed and integrated entertainment, retail and gaming resort called Studio City in 2001. An investment vehicle backed by Silver Point Capital, Oaktree Capital Management and other third-party investors took a 40.0 per cent voting interest in the business in 2006. This participation was followed by another in 2011 when a wholly-owned subsidiary of Melco Resorts and Entertainment acquired a 60.0 per cent stake. Up until 2015 when the resort officially opened, the two shareholders contributed USD 1.28 billion, which included USD 1.25 billion for the site and USD 30.00 million for the initial design work for the remaining project. Immediately prior to completing the listing in the US, Studio City, which had changed its name in 2012, will carry out a series or organisational transactions to redomicile in the Cayman Island and reclassify all ordinary shares outstanding into class A stock. The resort comprises 250 mass market gaming tables and 970 machines, as well as a family entertainment centre, a flight simulator, a night club, and a live performance area, not forgetting the hotel itself with 1,600 rooms and diverse restaurants and bars. Studio City’s listing provides exposure to a limited gaming concession market consisting of only six licences currently granted by the local government. The company itself operates the non-gambling business of the resort while the actual betting activities are handled by Melco Resorts Macau, which is a subsidiary of Melco Resorts. © Zephus Ltd