Melco International Development Ltd has raised nearly HKD770.8 million (US$98.2 million) in net proceeds through its recent rights issue, helping reduce debt and strengthen its financial position.
The Hong Kong-listed parent company of global casino group Melco Resorts & Entertainment Ltd confirmed the successful completion of the share offering in a filing on Monday.
Melco Resorts operates integrated casino resorts in Macau, the Philippines, and Cyprus, and is set to open a new casino in Colombo, Sri Lanka, later this year.
Over half of proceeds used to offset shareholder loan
Out of the total net proceeds, HKD389.9 million was used to partially settle a shareholder loan. This loan, amounting to HKD451.8 million, was provided to Melco International by associates of its chairman and chief executive, Lawrence Ho Yau Lung.
The loan was arranged on 24 April and was unsecured, with an 11 percent annual interest payable every two months. The maturity date for the loan is 24 October 2026.
Melco International had earlier explained in its rights issue prospectus dated 26 May that the loan was necessary due to “the limited availability of debt financing options for the company in the current market environment”.
Remaining funds to prepay credit facility debt
Following the partial set-off of the shareholder loan, Melco International now holds a balance of approximately HKD380.8 million from the rights issue. According to its latest filing, this amount will be used to prepay parts of the principal and interest under the company’s existing 2021 credit facilities.
These credit facilities were arranged in June 2021 and consist of a US$1 billion loan with a five-year term. The move is expected to improve the company’s balance sheet and ease upcoming repayment obligations.
Rights issue sees strong investor response
The rights issue involved the offer of up to 758,341,877 new shares to existing shareholders. Melco International stated that around 94.4 percent of the rights shares were taken up.
The shares were offered on the basis of one new rights share for every two existing shares. The subscription price was set at HKD1.0286 per share.
The high subscription rate reflects continued investor confidence, despite challenging market conditions for gaming operators in Asia.
Melco expands international casino footprint
Melco Resorts, the subsidiary of Melco International, operates major integrated resorts in multiple countries. It runs properties in Macau, the City of Dreams Manila in the Philippines, and casinos in the Republic of Cyprus.
The company is preparing to open its latest casino project in Colombo, Sri Lanka. Earlier, John Keells Holdings Plc, the local partner in the multi-million-dollar integrated resort project announced that casino at City of Dreams Sri Lanka, is on track for an August 2025 opening.
