Macao Studio City, the East meets West joint venture resort at Cotai’s border gate with Mainland China, may not be quite the dead parrot that many in the industry supposed.
“The institutional investors are quite happy to stay in there. They’re in no hurry to pull their money out,” a source told Asian Gaming Intelligence this week.
The reason? According to the contact, the current obstacles to the project are more political than financial.
“The Hong Kong investor [eSun Holdings] and [Singapore’s] CapitaLand couldn’t come up with the cash. They were partners in the land portion of the deal rather than the casino portion of the deal. The problem was, in a tightened credit market they had nothing to leverage from other than appreciating land values,” suggested the source.New Cotai LLC, the putative casino developer and operator for the project, is made up of non-Asian investors. New Cotai does have the potential revenues from the casino as leverage. That’s even after the costs of a gaming licence supplied by Melco Crown Entertainment (Nasdaq: MPEL) are taken into consideration.
“New Cotai and investment funds [Silver Point Capital and Oaktree] could have done it without the Asian investors. But the [Macau] government didn’t want it to be a foreigners-only project,” our source added
RelatedPosts
