By Kate O’Keeffe
Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)–Two senior executives integral to Galaxy Entertainment Group Ltd.’s (0027.HK) nearly US$2 billion casino resort project have resigned, the company said Monday, raising the possibility of delays.
Steve Wolstenholme, chief operating officer of the company’s flagship Galaxy Macau project, and Jeff King, senior vice president of marketing for Galaxy Macau, will depart shortly, Galaxy said in a statement, confirming an earlier Dow Jones Newswires report.
Wolstenholme, Galaxy Macau’s top-ranked executive, and King are two of only four executives dedicated to the project that are listed on the company website’s management page.
The Hong Kong-listed casino operator, controlled by the family of tycoon Lui Che Woo, said the management changes won’t affect the company’s performance or its project, which is still set to open in early 2011.
But Wells Fargo analyst Carlo Santarelli wrote in a report that he had already considered that to be “an aggressive timeline,” and the executives’ departure makes it seem “even less likely” the project will open on time.
Wells Fargo expects Galaxy Macau to open in May or June.
Wolstenholme and King couldn’t immediately be reached for comment.
“When management changes like this happen, you have to be concerned,” said Royal Bank of Scotland Group PLC analyst Philip Tulk. “The question is whether they have the bench strength to execute the strategy of the board and (Galaxy Entertainment Vice Chairman) Francis Lui.”
Aaron Fischer, an analyst at CLSA, said: “It’s never a good sign when people quit ahead of an opening.”
However, he added a management change soon before the opening wouldn’t preclude a strong launch. “People quit Las Vegas Sands (LVS) before the Marina Bay Sands opening and the initial performance has been successful,” he said.
Galaxy Entertainment, which is scheduled to report third-quarter operating data this week, said in August it would spend an extra HK$800 million to open a larger proportion of the 2,200 rooms planned for the Galaxy Macau project at its launch to “fully exploit” the fact that there will be no other new casino openings in Macau for “at least the next 12 months.”
Galaxy’s surprise decision to increase its investment in the project to a total HK$14.9 billion (US$1.92 billion) at such a late stage came as casino operators have been scrambling to boost their presence in the territory, the world’s largest gambling center.
Rival Sands China Ltd. (1928.HK) said in August it would delay the opening of its US$4.1 billion expansion project in Macau because of a lack of construction workers.
Galaxy said in a statement Wolstenholme resigned for personal reasons and will leave the company in November. Galaxy Entertainment President Mike Mecca will assume his duties “in the interim,” the statement said without elaborating.
The statement said Raymond Yap, the company’s senior vice president of international premium market development, will take over King’s duties while the company looks for a permanent replacement.
