Melco Crown’s Philippine Unit to Sell Shares for Casino Project
By Cecilia Yap - Feb 19, 2013 3:42 AM ET.
Melco Crown Entertainment Ltd.’s Philippine unit plans to sell as many as 1 billion new shares to help fund a $1 billion Manila casino venture.
Melco unit Manchester International Holdings Unlimited Corp. shareholders approved the plan at a special meeting today, it said in a stock exchange filing. The sale would raise as much as 15 billion pesos ($369 million) at today’s price. The company will be renamed Melco Crown (Philippines) Resorts Corp., Manchester said.
Melco Crown, a casino venture of billionaire James Packer and a son of gambling tycoon Stanley Ho, in December said it paid 1.26 billion pesos for a 93.1 percent stake in Manchester. It plans to invest about $600 million for a casino, hotel, retail and entertainment complex in the Philippines, which it will build with SM Investments Corp., Belle Corp. and its unit, Melco Crown said in an Oct. 25 filing with the Hong Kong stock exchange.
Belle holds one of four casino licenses the Philippines awarded to compete with Macau and Singapore.
The country’s annual revenue from gaming may rise to $10 billion in 2017 from more than $2 billion last year once the Manila casino complex is operating fully, Philippine Amusement & Gaming Corp. Chairman Cristino Naguiat said on Jan. 15.
Manchester’s Class A shares, reserved for Filipinos, rose 5 percent to 14.8 pesos at the close of trading in Manila. Its Class B shares gained 2.1 percent to 14.8 pesos. The Philippines’ benchmark stock index rose 0.9 percent to 6,620.72.
Shareholders also approved an over-allotment option of as much as 20 percent of the total shares to be sold. Terms of the offer, including the price, size and timing, have yet to be set by the board, Manchester said.
The sell-off is ridiculous. MPEL is not selling any shares.
MPEL bought what was basically a shell company in the phillipines. MPEL owns 93% of this shell company. This shell company is selling 1 billion shares. What was the shell company worth before this? NOTHING, bc they had no money and couldn't build or manage a casino.
Do MPEL owners experience any dilution? Nope. Except in that MPEL itself won't own 97% of the phillipine situation, since some percentage will be IPO'd.
But MPEL owners are not experiencing dilution the way everyone is trying to make it seem they are.
Thx. Do you understand how this will work? That is, Manchester to be 93.1% owned by Melco, but that is the management group? Melco also investing $600 Mil to be joint owner with SM Investments. So, shares being sold have ownership rights to management fees, I assume, but no ownership in casino stake? That is, MPEL isn't directly diluted by this share sale? Or, are you saying it does dilute us? TIA.