Melco Resorts Chairman and CEO Lawrence Ho says he wants the company to commence construction of Phase 2 of Macau integrated resort Studio City within the third quarter this year in order to meet its July 2021 deadline.
The tightening schedule follows a three-year extension granted by the Macau government in February for completion of Phase 2 from 24 July 2018 to 24 July 2021.
Addressing media questions at Friday’s grand opening of luxury hotel Morpheus at its flagship Macau IR City of Dreams, Ho said that Melco was currently finalizing Phase 2 expansion plans alongside its Studio City partners with the goal of commencing construction within the next few months. Studio City is 60% owned by Melco Resorts with the other 40% held by US hedge funds Silver Point Capital and Oaktree Capital Management.
“We have to work alongside some government departments, plus the shareholding structure for Studio City is a bit different so we have to work with two shareholders,” Ho said.
“We are still negotiating so hopefully in the second half we will commence work because by July 2021 we need to complete everything. Q3 or Q4 we want to commence work.”
Ho also confirmed that Phase 2 would be completely non-gaming with no plans to add a separate casino, however he said he was confident that the company was well-placed to be issued extra gaming tables for its existing Studio City casino in the future.
“We are very confident,” he said. “In the last 10 years in Macau in terms of non-gaming and diversification, we have already started following [government diversification instructions] if you look at The House of Dancing Water (at City of Dreams) and the elements at Studio City.
“In regards to our minority shareholders’ views, it is subject to their approval but in any case our gaming area in Phase 1 is enough. We can add slot machines if we want but in Phase 2 the business model needs to be a bit different. We can already accommodate the gaming needs in Phase 1.
“Our company all along has attached great importance to non-gaming amenities as evidenced by Morpheus, so Phase 2 will really place the focus on other types of entertainment. Phase 2 will be about how we can complement Phase 1.”
Ho revealed at G2E Asia last month that Melco will unveil a new stunt show at Studio City in December – a collaboration with renowned entertainment architecture firm Stufish.
