Melco International Development Limited, the Hong Kong-listed parent company of Macau concessionaire Melco Resorts, confirmed earlier this week that it had raised net proceeds of HK$770.8 million (US$98.2 million) via a rights issue, after expenses.
In a filing, Melco International said the proceeds from the rights issue will be used to prepay a portion of the principal amounts outstanding and interest payable under the 2021 credit facilities. However, the total amount that can be utilized for this purpose comes to around HK$380.8 million (US$48.5 million).
This, the company explained, is because it had previously drawn down HK$390 million (US$49.7 million) in shareholder loans, including from Chairman and CEO Lawrence Ho and his associates. Of the amount drawn under the shareholder loans, HK$389.90 million was set off against a portion of the subscription monies payable by Ho’s associates through this latest rights issue. The remaining HK$380.8 million will be put toward repayment of the 2021 credit facilities.
In announcing the results of its rights issue, Melco said it had received a total of 123 valid acceptances in respect of 715,893,206 rights shares provisionally allotted – representing 94.4% of the total number of rights shares available for subscription. It also received 82 valid applications for 9,149,341,617 excess rights shares, representing 12 times the total number of rights shares available. Given that valid applications significantly exceeded the rights shares on offer, the allocation was made on a “fair and equitable basis,” the company said.
Following the rights issue, Ho’s shareholding in Melco International has fallen slightly from 61.44% to 61.37%, while that of other shareholders has increased from 37.23% to 37.3%. The shareholding of directors has remained steady at 1.33%.