Melco International Development Corp. may decide as early as the end of this quarter whether to delay opening its Crown Macau Casino, Managing Director Lawrence Ho said today.
Melco, controlled by the family of Macau gaming tycoon Stanley Ho, will discuss the potential delay with joint-venture partner Publishing & Broadcasting Ltd. of Australia in the next few weeks, Lawrence Ho said in an interview in Macau today. The casino is scheduled to open in the fourth quarter this year.
Citigroup Inc. analyst Anil Daswani said in a report last week that Melco is considering delaying the casino opening to January 2007 to coincide with that of its adjacent Crown Macau Hotel. A delay may prompt Citigroup to cut Melco's estimated earnings this year by 66 percent to HK$143 million ($18 million), Daswani said. Melco shares fell 15 percent from Feb. 7 to Feb. 9 before regaining 5.4 percent on Feb. 10 to close the week at HK$11.65. The stock closed 0.9 percent higher at HK$11.75 today.
``Right now there's been no change'' to Melco's original plan to open the casino by the end of this year, Ho said. ``Having said that, the market has been changing rapidly. We will sit down with PBL's board in the next few weeks to decide what's the best way to do this.''
The company didn't set a deadline on when a decision will be made on the opening date, Ho said, adding that it's considering opening the hotel and casino together in order to take maximum ``branding effect.'' He dismissed the suggestion that there has been a delay in the construction process.
The Melco-PBL joint venture last month withdrew its bid to build Singapore's first casino, citing ``insufficient land fees to justify the development cost.'' Ho said the venture will continue to look for other opportunities in Asia, with specific focus on the potential liberalization of the Thailand market.
The Thai government estimated underground gambling revenue in the country roughly equaled 10 percent of the country's gross domestic product last year, Ho said. Opening up the country's gambling industry will be ``in the best interest,'' of the Thai government, which doesn't allow casinos, he said.
Melco also announced today it had signed a HK$1.28 billion syndicated loan, the biggest ever involving Macau-based banks. The loan facility has a tenure of seven years and carries an interest rate of the Hong Kong Interbank Offered rate plus 2.2 percentage points.
The loan is lead-arranged by the Macau branch of Bank of China Ltd. and Banco Nacional Ultramarino, S.A. Other participating banks include Banco Comercial de Macau, S.A., Industrial and Commercial Bank of China (Asia) Ltd., Banco Espírito Santo do Oriente, S.A. and Liu Chong Hing Bank Ltd. (1111)'s Macau branch.
To contact the reporter for this story: Kelvin Wong in Hong Kong at Kwong40@bloomberg.net