MGM China injects US$594 million into Macau unit to meet new casino bidding requirements

The subsidiary, MGM Grand Paradise, will tender for a new gaming concession in Macau, according to a filing
Pansy Ho, daughter of the late casino magnate Stanley Ho Hung-sun, would serve as managing director if the bid is successful

Macau

Martin Choi

Published: 2:30pm, 22 Aug, 2022

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MGM China will inject 4.8 billion patacas (US$594 million) into a subsidiary that holds a sub-concession to operate casinos in Macau to meet the bidding requirements for a new gaming licence.

The subsidiary, MGM Grand Paradise, will tender for a new gaming concession in Macau, the company said in a filing to the Hong Kong stock exchange on Sunday. If the tender is successful, Pansy Ho, the daughter of the late casino magnate Stanley Ho Hung-sun, will serve as managing director for the concession term of a maximum of 10 years.

MGM Grand Paradise “is in the process of applying for a concession for the operation of games of fortune or chance or other games in casino …[and] will approve Pansy Ho’s designation as the company’s managing director following the grant of a concession”, according to a filing on Monday.

Under the revised gaming law announced earlier this year, the Macau government said that it would increase the minimum capital for concessionaires to 5 billion patacas from 200 million patacas. The managing director must also be a Macau permanent resident holding at least 15 per cent of the capital in the concessionaire.

Streets were empty around MGM Grand Macau casino on July 11, 2022 as the territory endured a Covid-19 lockdown. Photo: AP

After receiving the injection, MGM Grand Paradise will issue 4,070,000 class A subscribed shares to MGM China at an aggregate subscription price of 4.07 billion patacas. Pansy Ho will receive 730,000 Class B shares at an aggregate subscription price of 730 million patacas.

Upon completion of the deal, the stakes of MGM China and the managing director in MGM Grand Paradise will increase to 84.6 per cent and 15 per cent, respectively.

Ho, 59, is ranked 28th in Forbes’ 2022 “Hong Kong’s 50 Richest” list and currently has a net worth of US$3.1 billion. She is also the co-chairperson of MGM China, and holds a 22.49 per cent stake in the company. MGM China’s majority shareholder is US gambling giant MGM Resorts International.

01:22

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Macau’s government said late last month that global gaming operators can submit bids for new licences from July 29 until September 14.

The licences of the six current operators Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings and Melco Resorts, are due to expire at the end of the year.

They must bid for new licences to remain in the Chinese special administrative region alongside new players also vying to operate.

Companies must also provide a guarantee of a minimum of 10 million patacas and submit the required qualification documents, the government said in a statement on its website.

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