MELCO Resorts and Entertainment (Philippines) Corp., the operator of City of Dreams Manila, said it wants to be delisted from the Philippine Stock Exchange (PSE).
In its disclosure, the company said its board approved the voluntary delisting of its common shares at the main board of the PSE.
It said its principal owner Macau’s Melco Entertainment decided to delist due to its Philippine unit’s inability to raise funds.
It said the main shareholder viewed Melco Resorts listed status “as an important tool allowing MRP to raise funds in the Philippine public market, in order to provide capital for expansion and other business plans.”
“However, the bidder [MCO Philippines, Melco’s Philippine unit] believes that MRP’s listed status in recent years has not contributed to its ability to raise funds despite considerable efforts and expenses being incurred to maintain its listed status,” it said.
Shares of Melco Resorts were temporarily halted for trading after the announcement. Its share price was last traded at P6.93 per share, down by 11 percent from its previous close.
Melco said it has been notified by MCO (Philippines) Investments Ltd., its majority shareholder, that it will conduct a tender offer for up 1.54 billion outstanding common shares held by the public, representing approximately 27.23 percent of the outstanding capital stock of the company at a tender offer price of P7.25 per share, a premium offering based on its previous close.
“The corporation has been further notified by MCO Philippines that MCO Philippines will publish an announcement regarding its intention to conduct the tender offer for the purpose of a voluntary delisting of the corporation,” it said.
The announcement comes after plans are announced for the expansion of City of Dreams Manila possibly beyond 2020, as it reaches its peak hotel occupancy.
“We are still studying the plans. But we need to do it [expand],” Belle Corp. Vice Chairman Willy N. Ocier said earlier.
“We may do it beyond 2020 because we still have to do some land acquisition. We have the land, but we find it too small, so we are acquiring,” he said.
Belle owns half of City of Dreams Manila, while Melco operates the entire facility. City of Dreams Manila was the second gambling facility to operate in Entertainment City after Enrique K. Razon’s Bloomberry Resorts Corp.’s Solaire Resorts and Casino.
Tiger Entertainment Okada Manila is the third operator, but lags behind the two.
Ocier said in August that it beat Solaire in terms of gross gaming revenues. No figures were provided.
“I hope that continues, and may I say that the gaming sector is quite healthy,” Ocier said.