MGM China Secures $750m Loan as Macau Market Continues to Struggle
A little help
MGM China has received a $750m loan from its parent company as the Macau casino market continues to struggle. According to a Hong Kong Stock Exchange filing, MGM China will get the funds via a subordinated revolving loan facility. The loan agreement between MGM Resorts International and its MGM China subsidiary was signed on Thursday.
interest rate at 4% per annum
The loan facility will be active for two years, with the loan’s interest rate at 4% per annum.
In the filing, MGM China said that the loan agreement shows how confident the two parties are in the long-term potential for growth in the Macau market. The firm said the additional financing capabilities will help it maintain its financial position and be able to fund future requirements, such as working capital.
Macau’s casino sector has struggled since the beginning of the COVID-19 pandemic. Travel restrictions have been in place for most of the time, which has led to significantly lower visitor numbers. During Q3 2022, gross gaming revenue was just 8% of pre-pandemic levels.
Most of the special administrative region’s casino operators have been experiencing significant losses. In its most recently reported quarter up to the end of September, MGM China’s earnings before interest, tax, depreciation, and amortization (EBITDA) loss reached $68.2m. Its occupancy was just 21% in the three-month period and it had a total market share of 13%.
Another source of concern for casino operators in Macau is that their licenses are currently up for renewal. The existing licenses will expire at the end of the year, with each of the six concessionaries having to prove that they are worthy of receiving a new ten-year license.
seven contenders for the six licenses
The application process has already begun, Onlookers expect that the successful candidates will be informed that they have earned a license before the end of 2022. There are seven contenders for the six licenses after Genting Group also threw its hat into the ring.
China has also enforced a crackdown on casino partnerships with junket operators who bring high roller business in from overseas. Stricter laws recently came into place regarding this. The rules also place more compliance obligations on operators.
The post MGM China Secures $750m Loan as Macau Market Continues to Struggle appeared first on VegasSlotsOnline News.