Melco Crown Entertainment Ltd. said there is a possibility it could default on its $1.4 billion Studio City project if it cannot secure certain conditions such as a minimum of 400 tables, the company said in its annual report filed on the Nasdaq.
The company said it must satisfy certain conditions prior to the formal opening of the property on October 1, 2016.
“These conditions require, among others, the full opening of Studio City for business to the general public by October 1, 2016, with a minimum 400 gaming tables available for operation, and a minimum area of public floor space occupied and open for operations. In the event that we are unable to meet these conditions, it may constitute an event of default under the Studio City Project Facility.”
“Any such event of default could cause all amounts outstanding with respect to the Studio City Project Facility to become due and payable immediately and entitle the lenders to take enforcement actions (unless the event of default is waived, or the debt is restructured or repaid).”
The company said in a separate filing that though it has been able to meet its working capital needs any additional financing requirements may not be available.
“We have been able to meet our working capital needs, and we believe that our operating cash flow, existing cash balances, funds available under the 2011 Credit Facilities and Studio City Project Facility and additional equity or debt financings will be adequate to satisfy our current and anticipated operating, debt and capital commitments…”
“For any additional financing requirements, we cannot provide assurance that future borrowings will be available. We have significant indebtedness and will continue to evaluate our capital structure and opportunities to enhance it in the normal course of our activities
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