The Macau Metro Monitor, April 12th, 2010
GALAXY GETS $1.1 BILLION LOAN TO FUND MACAU CASINO BusinessWeek
Galaxy Entertainment Group Ltd., the casino operator part-owned by Permira Advisers LLP, received a six-year HK$8.8 billion ($1.13 BN) loan for the construction Galaxy Macau. Seven banks including Industrial & Commercial Bank of China Ltd. and HSBC Holdings Plc helped structure the club loan. The facility will pay 4.5% + HIBOR. The resort is scheduled to open in early 2011. The company is accelerating construction and may have a “soft opening’ as soon as the end of this year, Chairman Lui Che Woo told reporters in Hong Kong today.
The facility “fully funds” the resort’s development, Galaxy said. “The terms of the club loan are significantly more favorable than the group’s existing bonds,” the company said. “This proposed agreement significantly lengthens the group’s debt-maturity profile as well as enhances its financial efficiency and flexibility.”
Galaxy Macau will be able to accommodate 600 casino tables, Chief Financial Officer Robert Drake said today. The resort will contribute a “significant amount” to the company’s balance sheet from 2011, he said.
FOREIGN AIRLINES EYE MACAO LICENCE Financial Times
There is an opening of an air operating licence following the dispute between Viva Macau and the Macao government. According to people close to the situation, interested parties include Malaysian budget carrier AirAsia, which has held preliminary talks about establishing a joint venture in the Chinese special administrative region. Macao’s civil aviation authority revoked Viva’s air operator certificate on March 28.
Viva maintained last week that it stood “ready to resume service with our reinstated AOC”, and some of the airline’s financial backers are scheduled to meet Fernando Chui, Macao’s current chief executive, today. The Macao government could choose to reinstate Viva’s AOC, with or without new partners, or pursue discussions with other airlines about entering the market, which is dominated by state-owned Air Macau.
While AirAsia considered becoming involved with Viva at the time, talks had not progressed beyond initial stages. AirAsia would also insist on operational control over any joint venture with Viva, along the lines of its existing joint ventures in Indonesia, Thailand and Vietnam. “Most likely AirAsia won’t go in because of this and other considerations, but the idea is still being considered,” one person involved said. He added that the Malaysian airline was “fully occupied” with the Vietnam joint venture with Vietjet Air, which was cleared last week by Hanoi.
A Macao deal would also offer the possibility of taking advantage of Macao’s “fifth freedom” rights to operate flights to the US.