In an overnight note, Credit Suisse has identified Sands China as the only one of Macau’s six casino gaming concessionaires which does not meet the MOP$5 billion (US$625 million) minimum capital requirement under the new Macau gaming law.
However, the investment bank says this “can be easily resolved [by a] capital injection from the listed [company] to the license holding subsidiary.”
Clause 17 of the new Macau gaming law clarifies that concessionaires must maintain their net assets value above a MOP$5 billion minimum level during the entire concession period. Credit Suisse stated, “According to the disclosures reported to the regulator DICJ, Sands China’s concessionaire remains the only entity with equity falling below the threshold” and provided the following table showing the equity (equivalent to net assets) and total assets of the six Macau concessionaire entities for 2021.
| Concessionaire | Ticker | Assets (MOP$b) | Equity (MOP$b) |
|---|---|---|---|
| Melco | MLCO.OQ | 64.1 | 30.7 |
| Galaxy | 0027.HK | 65.2 | 11.9 |
| Wynn Macau | 1128.HK | 33.2 | 9.1 |
| MGM China | 2282.HK | 29.0 | 7.6 |
| SJM | 0880.HK | 50.0 | 5.2 |
| Sands China | 1928.HK | 81.4 | 1.7 |
With the net assets of Sands China’s concessionaire at just MOP$1.7 billion (US$213 million), the entity would require an injection of capital of MOP$3.3 billion (US$413 million) – presumably from the parent listed company – to meet the new minimum capital requirement.
Under the previous Macau gaming law, passed in 2001, the minimum capital requirement for concessionaire entities was just MOP$200 million.
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