Melco Resorts & Entertainment has revealed a budget of US$1.4 billion for its Phase 2 expansion of Studio City, with development to be funded by cash on hand and additional borrowings.
Providing an update during Melco’s second quarter earnings call following a strong showing from flagship Macau IR City of Dreams, Chairman and CEO Lawrence Ho said the company’s focus will now turn to its long-awaited Studio City build-out which will add another two hotel towers plus a Cineplex, indoor water park and additional gaming space.
“We have budgeted US$1.35 billion to US$1.4 billion for the Studio City expansion,” Ho said, adding that Melco had no plans to issue additional equity to fund construction. “Based on our outlook for profitability at Studio City, given the significant cash on hand, cash flow from operations and some additional borrowing, that’s really the plan for funding Phase 2.
“If things were to change, we have the listings as another avenue for raising capital, but at the moment our plan is definitively cash on hand, cash from operations, and additional borrowings.”
Ho also pointed to September as the latest goal to start construction of Phase 2 given the government-issued deadline for completion is now just two years away. The tight schedule follows a deadline extension granted to Melco last year from the original deadline of 24 July 2018 to 24 July 2021.
“We’ve been working on that,” Ho said. “I think we have made some headways, a lot of the ground preparation, site preparation works have been done, and we’re hopeful that we can commence tiling mobilization by the middle of September. Things are moving, finally.”
