Melco Crown says no immediate need for equity funding


Wed Nov 30, 2011 5:39am EST

* Comfortable funding new project with existing cash flow

* Aims to outperform Macau gaming rev growth of 15-20 pct in
2012

By Farah Master

HONG KONG, Nov 30 (Reuters) – Melco Crown
Entertainment Ltd, the Macau casino venture owned by
Australian billionaire James Packer and Hong Kong businessman
Lawrence Ho, said it can fund its new multi-billion dollar
casino project in the world’s largest gambling destination
without raising new equity.

Melco, one of six licensed operators in Macau, is proceeding
with a dual listing by introduction in Hong Kong, scrapping an
earlier share sale it had announced in August because of market
volatility.

“We are comfortable that we can fund our equity component of
the financing of Macau studio city with existing cash and
cashflow,” said Chief Financial Officer Geoffrey Davis, adding
that discussions with banks were in progress for financing.

He said listing by introduction would offer the flexibility
to raise capital in the future when and if needed.

Melco’s Macau Studio City, a large-scale gaming and
entertainment resort on the developing Cotai strip, is likely to
be one of the first new properties to open after U.S. tycoon
Sheldon Adelson opens his new Sands casino early next year.

Lawrence Ho, chief executive and co-chairman of the
U.S.-listed company, told reporters that Melco was ready to
kickstart the project and was waiting on government processes.

Ho said Melco would aim to outperform the broader industry’s
gaming revenue growth in the coming year.

“Growth rates of some 50-60 percent are not sustainable in
the long run. In 2012, I expect industry growth to be around
15-20 percent, he said.

Fears that a tightening of liquidity for Macau’s junkets, —
middle men who loan credit to high rollers from China and are
responsible for collecting debts — would impact revenue from
the lucrative VIP sector had not materialised, executives said.

“We are not seeing any changes in patterns in terms of
velocity of money. Things have been pretty consistent for the
last 12-18 months,” Davis said.

Melco said on Nov. 18 that its proposed Hong Kong listing
would proceed by way of introduction rather than a $400-600
million global offering as had been originally planned, with
trading in its shares expected to start on Dec. 7 under the
listing symbol 6883.

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