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SCIHL to raise up to USD 500mn
Posted on Wednesday, 08 July 2020 11:26
Studio City International Holdings (SCIHL) is carrying out a series of private placements of class A shares that will raise between USD 450.00 million and USD 500.00 million.
The Cayman Islands-registered, New York Stock Exchange-listed company said it would issue new stock at USD 3.89 apiece to certain institutional existing investors.
Melco Resorts and Entertainment currently owns 54.3 per cent of SCIHL, which is the controlling entity of the Studio City casino resort in Macau.
Through indirect, wholly-owned subsidiary MCO Cotai, the group will buy up all the class A shares offered it.
In a concurrent deal, SCIHL’s wholly-owned subsidiary, MSC Cotai, is providing Silver Point Capital and Oaktree Capital Management-backed New Cotai with a right increase its 36.3 per cent stake by acquiring an additional participation interest.
The outbreak of Covid-19 has had an adverse effect on results of operations and financial condition in the first quarter of 2020, which has persisted into the second quarter of 2020 and beyond.
Health safeguards and falling tourism due to travel restrictions meant total visiting was down in February, March, April and May 2020, when compared to the same timeframe in 2019.
As at 31st May 2020, SCIHL had cash and equivalents of USD 205.10 million and a revolving credit facility of HKD 233.00 million (USD 30.06 million).
The group had total principal amount of outstanding indebtedness of USD 1.45 billion at the end of May.
SCIHL opened Studio City in October 2015, but development of the remaining land is still ongoing and in the early stages.
Although the company has already made significant investments in the casino resort, it expects to require significant additional capital to complete the project.
As of 31st March 2020, it had incurred USD 104.90 million in aggregate costs relating to the development of the remaining land.
Based on current estimates, SCIHL expects a project budget of USD 1.25 billion to USD 1.30 billion to finish off the project.
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