Funds will be used for working capital needs and general corporate purposes.
Macau.- Casino operator MGM China Holdings Ltd has been granted revolving credit of HKD2.34billion (US$301million).
According to a filing to the Hong Kong Stock Exchange, the company could take an “increase option” to access credit of up to HKD3.9 billion, subject to “certain conditions”.
The revolving credit will bear interest at a fluctuating rate per annum based on HIBOR (Hong Kong Interbank Offered Rate), plus a margin in the range of 1.625 per cent to 2.75 per cent.
The latter margin “will be determined by the company’s leverage ratio,” MGM China said.
“The revolving credit facility will be available for drawing from the date of the facility agreement to and including the date falling one month prior to the final maturity date (subject to satisfaction of conditions precedent, including evidence that [MGM China’s] existing HKD9.75billion senior unsecured revolving credit facility has been fully drawn),” the company said.
It also explained that the new revolving credit facility would have to be prepaid if U.S.-based casino operator MGM Resorts International “ceases to be the legal and beneficial owner directly or indirectly of more than 50 per cent of the issued share capital” of MGM China.
According to the statement, the proceeds of the revolving credit facility will be used for working capital needs and general corporate purposes.
It was announced in April that MGM China’s first-quarter net revenues were reached US$271.9million, down 63 per cent from the prior-year quarter.
The negative financial result was attributed to the impact of the Covid-19 pandemic.