City of Dreams Manila operator Melco Resorts and Entertainment (Philippines) Corp has approved a measure to reduce the number of common shares in the company from 5.9 billion to just 11,800 by increasing the value of each share.
The amendment to the company’s Amended Articles of Incorporation will essentially see the current share capital consolidated into 11,800 shares with the value of each share changing from Php1 to Php500,000.
Melco (Philippines) explained the reason as being to “increase the value of each share in the company and decrease the number of the company’s shareholders.”
The change comes in the wake of last year’s tender of public shares which saw MCO (Philippines) Investments Limited, a subsidiary of Melco International Development Ltd, increase its stake in Melco Resorts and Entertainment (Philippines) from 72.54% to 96.1%, with the remaining stake held by other shareholders.
The company had originally planned its tender offer as a means of delisting from the Philippine Stock Exchange but was forced to reverse that decision in October due to a series of investor concerns. It said at the time that the tender offer would proceed instead for the purpose of increasing the shareholding of MCO in the company.
In its filing this week, Melco said that in the event of grouping its current share capital into larger batches creates fractional shares, MCO has proposed purchasing the fractional shares at a price of Php7.25 per current share – the same price as last year’s tender offer.
The reduction in shares will almost certainly see MCO’s stake edge closer to 100%.
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