Melco Resorts has entered into definitive agreement to acquire a 75% equity interest in Cyprus’ City of Dreams Mediterranean project.
Cyprus.- Melco Resorts & Entertainment announced on Monday that it has entered into a definitive agreement to acquire from Melco International Development Limited all of Melco International’s holding of ordinary shares of ICR Cyprus Holdings Limited.
The holding of ordinary shares represents a 75% equity interest in ICR Cyprus. The latter, along with its subsidiaries, is developing the City of Dreams Mediterranean integrated destination resort project in Cyprus. The casino is currently under construction and scheduled to open in 2021. After opening its doors to the public, it will become the largest integrated resort (IR) in Europe.
Melco will acquire the Acquisition Shares in exchange for 55.5 million ordinary shares of Melco Shares. As reported by the company, these are equivalent to €330 million. A special committee of independent directors formed by the company’s Board of Directors to consider the acquisition unanimously approved the transaction.
Moreover, the transaction is subject to customary closing conditions, including the approval by certain Cyprus regulatory authorities. It is also subject to the execution of a new shareholders’ agreement, the ICR Cyprus 25% shareholder and ICR Cyprus.
The company pushed the opening date
The first IR in Europe was supposed to open its doors by the summer of 2021 but the date was pushed to the end of that year. Last month, Integrated Casino Resort Cyprus (ICR) reported that Avax-Terna won the tender for the construction of the IR. While construction began last month, and despite the request for it to be ready within 24 months, it seems like the extensive infrastructure required for the facility won’t allow this to happen.
A source close to the project told Phileleftheros that the original design of the IR suffered minor changes. This was reportedly because there were concerns around the layout of the casino’s premises. They also expanded infrastructure, increased the number of guest rooms and added more gaming area.
The changes made to the infrastructure push the cost of the investment way higher than the €550 million originally estimated. However, Melco Resorts is yet to address if this will change its overall plans for the facility.