MGM China warns high indebtedness could impact financial obligations

The casino operator has warned of challenges.

Macau.- MGM China has highlighted concerns over its indebtedness, citing potential challenges in meeting obligations related to unsecured notes. With net debt of HK$19.1bn (US$2.44bn) as of December 2023 and significant unsecured senior notes and credit facilities, MGM China warned of potential limitations on operational flexibility and competitiveness, particularly in the event of default. 

The group warned that it could have difficulty growing because of its high levels of debt, mostly incurred during the pandemic years. According to Asia Gaming Brief, the company’s management has established a team responsible for managing credit risk associated with VIP gaming customers and gaming promoters. This team is responsible for setting credit limits, approving credit, monitoring overdue debts and ensuring that necessary follow-up actions are taken.

In 2023, the company posted net revenue of HK$24.7bn (US$3.2bn), up 369 per cent in year-on-year terms. Adjusted EBITDA was a record HK$7.2bn, representing 117 per cent of 2019 levels.