Lenders to Melco Crown’s Studio City face debt renegotiations as the company does not have enough gaming tables for the $3.2 billion project ahead of requirements that it must meet next year, Bloomberg reports.
The company, controlled by billionaires Lawrence Ho and James Packer, said it “intends to proactively engage” lenders after Macau’s government authorized it to operate 200 gaming tables and 1,233 gaming machines upon the opening of Studio City on Oct. 27, with another 50 tables to start operation from January 2016.
The company’s $1.4 billion in secured loans require it to have 400 operating tables by October 2016, according to Standard & Poor’s Ratings.
“Unutilized tables from other Melco casinos could likely be allocated to Studio City if there is a need,” said Union Gaming analyst Grant Govertsen.
Given the new casino is a joint venture 40 percent-owned by hedge funds while the company owns the rest, “we don’t think Melco has much incentive to transfer these tables now and, honestly, given the current demand, 250 tables may be enough for the new casino,” he said.
Melco also operates projects including the City of Dreams and Altira Macau in the city, with 619 gaming tables as of end-June, according to data compiled by Bloomberg Intelligence.
Its adjusted property earnings before interest, taxes, depreciation and amortization fell 35 percent to $204.9 million in the second quarter.
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