SJM Holdings weighs on Macau casino stocks after proposing a US$386 million cash call for licence renewal bid
- SJM plunges as much as 16.9 per cent in Hong Kong, dragging Sands China, MGM China and Melco along with it
- SJM’s plans to raise equity at a 34 per cent discount ‘disappointing and surprising’, says Morningstar’s Jennifer Song
SJM Holdings plunged in Hong Kong on Thursday after the company proposed an equity raise at a 34 per cent discount, as it rushes to raise funds for Macau’s gaming licensing tender.
The Macau casino operator fell as much as 16.9 per cent, before closing 12.1 per cent lower at HK$2.76, while the Hang Seng Index rose 2.1 per cent.
The company said in an exchange filing late on Wednesday that it plans to raise HK$3.03 billion (US$386 million) from issuing 1.4 billion rights shares at HK$2.08 per share, a 34 per cent discount to its last closing price of HK$3.14.
Along with an unsecured term loan of HK$2 billion from majority shareholder Sociedade de Turismo e Diversoes de Macau, analysts expect SJM to have around HK$5 billion to bid for a 10-year gaming concession commencing on January 1, 2023.
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