MGM Resorts remains fully committed to pursuing an IR bid in Japan despite the added pressure being placed on its global resources by COVID-19, according to Acting CEO Bill Hornbuckle.
The issue of MGM’s expansion plans was raised during its 1Q20 earnings call on Friday (Macau time), with the company having earlier flagged monthly cash outflow of US$270 million in the United States where all properties remain closed and another US$1.5 million daily – around US$45 million per month – in Macau where border restrictions have stymied visitation.
Asked if the impact of COVID-19 could alter MGM’s bid to develop an IR in Osaka, Hornbuckle replied, “We still see Asia as a huge build and a huge upside for the company, and frankly for the industry.
“We’re very bullish on Macau in the long run and we’re absolutely bullish on Japan in the long run. We’re still in the zone of a US$10 billion investment and the returns on that will be determined once we get through all the regulations. But they are significant and they would be significant to the company in its overall portfolio and how we balance our earnings as we look at everything we have. So, we remain bullish.”
On Japan’s IR timeline, Hornbuckle suggested a delay was becoming increasingly likely despite the national government having so far stuck with its original plan to hold the RFP process between January and June 2021. Osaka, Yokohama and Nagasaki are among the candidate locations to have already delayed their own RFPs and the latest 25-day extension to Japan’s state of emergency declaration, revealed on Friday, will put further pressure on the Diet to do the same.
I think the impact of that is it will slow it down,” Hornbuckle said.
“We are not definitively sure of the RFP process as it currently sits in Osaka but we are ready for this. We have an RFP submission (in Osaka) that is due at the end of July. Our team has worked hard on this and as you know we’re the lone standing applicant there.
“We would submit, but I think what may happen is the whole process gets pushed closer to the end of the year, which I think is appropriate and fine by us. I think it will get delayed and we’re ready whether it does or it doesn’t.”
MGM Resorts was left as the sole remaining candidate to develop an Osaka IR after it was revealed in February that neither Galaxy Entertainment Group nor Genting Singapore had applied to submit a bid.
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