MGM China Holdings Ltd (美高梅中國控股) is to inject 4.8 billion patacas (US$592 million) into a subsidiary to qualify the unit to bid for a new Macau casino license ahead of the expiry of existing permits at the end of this year.
The injection would enable MGM Grand Paradise Ltd (美高梅金殿超濠) to fulfill a requirement that license-holding companies must have at least 5 billion patacas in capital, according to a Hong Kong Stock Exchange filing on Sunday.
If the tender is successful, Pansy Ho (何超瓊) is to serve as managing director of the unit for the entire term of the license.
Photo: Reuters
Ho, daughter of late casino tycoon Stanley Ho (何鴻燊), is to receive 730,000 Class B shares and earn US$8 million a year. She would also be entitled to incentive payments of up to US$95 million over the license term, based on MGM Grand Paradise’s earnings.
Macau’s new gaming law requires the licensee to have a managing director who is a permanent resident to hold at least 15 percent of the company’s capital, up from the 10 percent required for current casino permits.
Upon completion of the share arrangement, MGM China would hold almost 85 percent of the unit’s capital and voting rights, Ho would have 15 percent and MGM China’s parent MGM Resorts International would own 0.4 percent, down from the current 10 percent, MGM China said in the statement.
The announcement offers some of the first clues as to how major casinos would navigate Macau’s industry overhaul. Despite bleeding millions of dollars of cash every day as China’s “zero COVID” policy batters tourism, Macau’s six operators have all expressed interest in securing new permits, which would allow them to stay in one of the world’s top gambling markets for a maximum of 10 more years.
Operators also need to make substantial commitments in non-gaming industries and are required to plan investments in areas such as cultivating overseas tourism, organizing art exhibitions, developing Chinese medicine tourism, building theme parks, supporting technology development and hosting international conferences and sports events.
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