Studio City International Holdings Ltd (SCIHL) announced Monday that it expects to receive gross proceeds of around US$500 million following completion of a series of private offers of its Class A shares to investors.
The offers, first announced in early July, are aimed at significantly boosting the company’s liquidity as it looks to navigate COVID-19 and to fund development of Studio City Phase 2.
They will also see Melco Resorts & Entertainment and US hedge fund-backed New Cotai Holdings, SCIHL’s two largest shareholders, further increase their interest after they subscribed to the majority of shares on offer.
On Monday, Melco Resorts parent Melco International Development Ltd revealed that MCO Cotai, a wholly-owned subsidiary of Melco Resorts, had agreed to purchase 72,185,488 Class A Shares from SCIHL at an aggregate price of US$280.8 million, boosting its stake from 54.1% to 54.7%.
Likewise, it said New Cotai and one of its affiliates agreed to purchase 49,119,164 shares at a price of US$191.1 million. Its stake in SCIHL will grow from 36.82% to 37.22%.
SCIHL recently revealed that the average operating costs of Studio City during the three months to 30 June 2020, which were heavily impacted by border closures due to COVID-19, were around US$700,000 per day.
The company also noted the need to raise further funds to complete development of Studio City Phase 2, with full development cost estimated at between US$1.25 billion and US$1.3 billion. Expenditure on the project currently sits at US$104.9 million.