Galaxy Entertainment Group is set to delay the opening of its flagship Cotai casino resort from next year to 2010 as a “tactical response to wider market conditions,” it said.
The company denied speculation about a funding shortfall. The new resort will need to start generating cash pretty smartly though when it does finally open. Analysts say Galaxy is due to repay a USD250 million credit note in December 2010.
They added though that a delay could buy Galaxy time to wait for an improvement in the credit market. A postponed opening might also allow the company to stagger payments to building contractors and fit out many of the hotel rooms from operating revenue.
“We are confident that the Cotai project is well capitalised [enabling it] to open through a combination of existing cash on hand, credit facilities, project cost reductions and cash generated from operations”, Galaxy said in a statement.
The previously announced plan had been to open the first phase of the HKD10 billion resort, including a 1,500-room Galaxy-branded hotel tower, in the third quarter of 2009, followed by a 400-room Okura hotel and a 254-room Banyan Tree hotel by the end of that year.
Galaxy said the landscaping of the grounds and the fitting of glass to the towers would only be completed by the end of next year. Interior fitting would be announced later, along with a revised opening date, it added.
“The group remains committed to its conservative philosophy of building to market demand. The phased development approach for Galaxy Macau is consistent with this philosophy,” the company said in a statement to the Hong Kong stock exchange.
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