By Ben Blaschke
The total cost of preparing SJM’s Grand Lisboa Palace for opening is expected to hit HK$36 billion, according to the company’s Chairman and CEO Dr Ambrose So.
Speaking at the official signing ceremony of a HK$25 billion syndicated loan facilities agreement at Macau’s Grand Lisboa on Thursday afternoon, Dr So said that the actual cost of opening was higher than the originally stated HK$25 billion estimation due to a range of peripheral expenses.
“That (the HK$25 billion) is only for casino construction but there is also interior decorations, land costs, preliminary expenses and opening expenses,” Dr So said. “Everything inclusive is about HK$36 billion – we are trying to keep it below HK$36 billion.”
SJM signed its syndicated loan facilities agreement – which was led by ICBC – with 19 banks and financial institutions comprising a HK$15 billion term loan facility with final maturity in 2022 and a HK$10 billion revolving credit facility with final maturity in 2020.
The funding will be used for completion of Grand Lisboa Palace in Cotai, scheduled to open in late 2018. However, Dr So said he was confident the property would prove a success with Macau’s gaming climate enjoying a strong period or recovery after two years of downturn.
“It not only gives me confidence, it also gives the banks confidence as well,” he said. “I am told by the leading bank that there are some more banks chasing after them for a secondary market where they can give them some syndication.
“I think it is a safe bet because we are the last one to compete and we do not have too much pressure on cost escalation. It was quite sticky at that time because people were looking at the forecasts of the revenue. At that time everybody was not very optimistic about the future but now that the market has started to turn everybody is feeling more confident.”
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