MGM China Ltd has revised upwards the maximum fee the group may be required to pay to Hong Kong-listed Shun Tak Holdings Ltd in 2025 for the use of its Macau hotel rooms and associated services by HK$20 million (US$2.6 million) to HK$200 million (US$25.7 million).
Shun Tak’s Macau hotels include Mandarin Oriental and Artyzen Grand Lapa.
MGM said in a filing that the revised cap was necessary due to an expected increase in demand for offsite gaming accommodation and the amount of room purchases by the group. As such, the aggregate amount to be paid to Shun Tak for the remainder of the financial year under the two companies’ Fourth Renewed Master Service Agreement is expected to be higher than envisaged at the time of entering into the agreement.
The Fourth Renewed Master Service Agreement originally placed the cap at HK$180 million (US$23.1 million) of which HK$87.1 million (US$11.2 million) had been paid through 30 June 2025. MGM also revealed that it paid Shun Tak HK$70.3 million (US$9.0 million) in FY23 and HK$153.6 million (US$19.7 million) in FY24.
The revised cap was, it added, calculated based on those historical payments plus “the estimated quantity of laundry services, property cleaning services and provision of rental of hotel rooms at agreed rates which may be required by the MGM Group during the remaining period.”
MGM also stated that its revised agreement with Shun Tak “shall continue to enable the MGM Group to foster its hospitality-related business in Macau and enhance its overall revenue.”
The deal with Shun Tak is considered a connected transaction due to the dual roles of Pansy Ho, who serves as Chairperson and Executive Director of MGM China and holds a 22.49% stake in the company, and serves as Chairperson and Managing Director of Shun Tak while also holding a substantial stake.
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