MGM China gets nod for new Macao casino resort
Updated: 2013-01-10 07:07
By Bloomberg(HK Edition)
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MGM China Holdings Ltd - a venture between a daughter of casino mogul Stanley Ho and MGM Resorts International - has received the Macao government's approval to build its second resort in the Macao SAR.
The company's share price surged more than 7 percent to close at HK$15.86 in Hong Kong trading on Wednesday.
The venture will pay a land premium of 1.29 billion patacas ($162 million) and annual rent of 2.15 million patacas to develop a five-star hotel and a casino resort.
The new project will give MGM China its first resort in Macao's Cotai area, Asia's equivalent of the Las Vegas Strip.
The company joins other operators, including Galaxy Entertainment Group Ltd and Sands China Ltd, in expanding in the gambling hub, the only place in China where casinos are legal.
The lease will last 25 years, the gazette said. MGM China made initial payments to the Macao government for the project, the company said in a statement to Hong Kong's stock exchange in October. The formal approval allows the company to proceed with construction plans on the 71,833-square-meter site.
MGM China, partly owned by Stanley Ho's daughter Pansy, jumped 7 percent to HK$15.86 in Hong Kong for its highest close since August 2011. The benchmark Hang Seng Index rose 0.5 percent.
"The formal approval means everything is set for MGM China to move ahead," said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group.
The casino resort, which will include 1,600 hotel rooms, 500 gaming tables and 2,500 slots, will take as long as 36 months to build, according to a statement from MGM on Wednesday. It will cost about $2.5 billion.
Galaxy, controlled by Hong Kong business tycoon Lui Che-woo, has said it plans to invest up to $6.5 billion to expand the third phase of its existing resort in Cotai. The company expects to begin construction, which will cover about 929,000 square meters, at the end of this year or early next year.
Gaming revenue in Macau jumped 14 percent to a record 304 billion patacas last year.
(HK Edition 01/10/2013 page2)