MGM China has HKD3billion (\u20ac356million) in cash and a revolving credit facility from banks amounting to HKD4.5billion (\u20ac534million).<\/p>\n\n\n\n\n\n\n\n
Macau.- Casino operator MGM China Holdings Ltd<\/strong><\/em> has enough liquidity to face 15 months or more without generating any revenues and without the help of any other sources of liquidity amid the current Coronavirus crisis.<\/p>\n\n\n\n This is according to a Sanford C. Bernstein Ltd<\/strong><\/em> report which states that MGM China has HKD3billion (\u20ac356million) in cash and a revolving credit facility from banks amounting to HKD4.5billion (\u20ac534million).<\/p>\n\n\n\n The numbers were described as \u201cenough for six to 15 months of shutdown\u201d by analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu.<\/p>\n\n\n\n Sanford Bernstein described a \u201cworst case scenario\u201d, with Macau casinos either closed or working with a \u201cvery low level\u201d of business for \u201can extended period of time and with limited ability to reduce expenses\u201d. <\/p>\n\n\n\n In that case, MGM China would have a daily \u201ccash burn rate\u201d of HKD16.1million per day. The bulk of that would be daily operating and corporate expenses of HKD11.7million, as per management guidance.<\/p>\n\n\n\n Staff remuneration and utilities costs comprise most of such expenses, according to the note.<\/p>\n\n\n\n This is considering that in late March the board of MGM China Holdings recommended spending about HKD315million on a final dividend for its 2019 business.<\/p>\n\n\n\n \u201cLiquidity concerns are not a near-term issue even in a near zero-revenue environment\u201d, continued the brokerage, and added MGM China had \u201cmoderate leverage\u201d of 2.9 times debt over last 12 month earnings before interest, taxation, depreciation and amortisation; equal to 2.6 times net debt, and had \u201cobtained a [covenant] waiver on its bank debt through June 2021\u201d.<\/p>\n\n\n\n \u201cThere are a whole host of issues with trying to divest MGM China, including finding a buyer that the Macau government would agree to (not a very easy foray) and also dealing with MGM\u2019s partner, Pansy Ho, who would not necessarily look favourably at a new partner,\u201d the analysts said.<\/p>\n\n\n\n Macau’s casinos are currently open, but visitor numbers remain low due to border restrictions mandated by authorities in order to contain the spread of Coronavirus in the city. <\/p>\n\n\n\n While this is having a negative impact on the sector, analysts believe the industry could return to normal levels by June.<\/p>\n","protected":false},"excerpt":{"rendered":" MGM China has HKD3billion (\u20ac356million) in cash and a revolving credit facility from banks amounting to HKD4.5billion (\u20ac534million).<\/p>\n","protected":false},"author":2,"featured_media":2238,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"is_press_release":false,"is_interview":false,"is_opinion":false,"focusai_summary":"MGM China Holdings Ltd possesses HKD3 billion in cash and a HKD4.5 billion revolving credit facility, providing sufficient liquidity to sustain operations for 15 months or more without revenue, even under a worst-case scenario with a daily cash burn rate of HKD16.1 million. A Sanford C. Bernstein Ltd report highlights the company's moderate leverage and a covenant waiver on its bank debt through June 2021, mitigating near-term liquidity concerns despite low visitor numbers in Macau.","focusai_entities":"MGM China Holdings Ltd, Sanford C. Bernstein Ltd, Vitaly Umansky, Eunice Lee, Kelsey Zhu, MGM, Pansy Ho","focusai_location":"Macau","focusai_target_profile":"ceo_executive (1.0), regulator (0.7), operator_casino (1.0), investor_analyst (1.0), supplier_vendor (0.8), journalist_researcher (1.0)","focusai_suggestions":[{"label":"Macau Market Recovery?","query":"What specific indicators or policy changes are anticipated to drive the Macau gaming market's return to pre-pandemic GGR levels by June, as projected by analysts?"},{"label":"MGM China Debt Strategy?","query":"Given MGM China's moderate leverage and covenant waiver, what are the long-term debt management strategies and potential capital expenditure plans once market conditions stabilize?"}],"footnotes":""},"categories":[160,161,16338,163,167],"tags":[257,1618],"class_list":["post-5711","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-pacific","category-daily-news","category-east-asia-news","category-finance-news","category-news-region","tag-macau","tag-mgm-china"],"_links":{"self":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5711","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/comments?post=5711"}],"version-history":[{"count":4,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5711\/revisions"}],"predecessor-version":[{"id":777022174,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/posts\/5711\/revisions\/777022174"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media\/2238"}],"wp:attachment":[{"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/media?parent=5711"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/categories?post=5711"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/focusgn.com\/asia-pacific\/wp-json\/wp\/v2\/tags?post=5711"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}