To comply with Macau’s amended gaming law, Ho’s stake in MGM Grand Paradise will increase from 10 per cent to 15 per cent.
Macau.- Through a company filing, MGM China has announced that Pansy Ho Chiu King will remain as managing director of MGM Grand Paradise SA for at least another 10 years. The company also announced that she will increase her stake in the casino operator from 10 per cent to 15 per cent.
According to MGM China, the transaction was conducted to comply with a requirement of Macau’s new gaming law, which states that the managing director of gaming concessionaires must be a Macau SAR resident and hold at least 15 per cent of the company’s equity.
MGM Grand Paradise will issue and allocate 4,070,000 A shares and 730,000 B shares to MGM China, of which 730,000 MOP B shares will be transferred to Pansy Ho Chiu King. After the transaction is completed, MGM China will hold 84.6 per cent of the voting rights in MGM Grand Paradise. Ho will hold 15 per cent and MGM Resorts International 0.4 per cent.
Meanwhile, if the bid for the gaming concession is successful, Ho will receive US$8m a year as CEO job, with a bonus based on MGM Grand’s average pre-interest income. Taxes, depreciation and amortization (EBITDA) could be as high as US$95m over the 10-year franchise period.
Macau’s new gaming legislation allows up to six gaming concessions – equal to the current number – with a length of 10 years. Casino operators must have a registered capital of at least MOP5bn while their licences are valid.
The commission tasked to oversee Macau’s gaming concession retender has announced the period for submitting bids will run until 5.45 pm, Macau time, on September 14.
MGM China posts EBITDA loss of US$48.7m for Q2
MGM China has shared its financial results for the second quarter of the year, posting revenue of HK$1.12bn (US$143m). That’s a drop of 46.4 per cent quarter-on-quarter and down 53.5 per cent when compared to last year.
The company saw its adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) for the second quarter of 2022 turn negative to HK$382.4m (US$48.7m). Last year Q2 EBITDA was HK$116m. In the first quarter of 2022 it was HK$45.7m.
For the first six months of the year, MGM China posted revenue of HK$3.22bn, compared to HK$4.71bn for the same period last year. Adjusted EBITDA was a negative HK$336.7m compared to positive HK$200.35m in H1 2021.