Melco PBL Just Short of Raising US$219 million
Written on November 6, 2007 by Macau
Melco PBL ’s casino joint venture has fallen at least $US130 million short in its latest capital raising in the US amid pessimism about the gambling sector.
Melco PBL yesterday announced it had raised another $US581 million in the US, $219 million less than the $US800 million it had hoped to raise. The banks managing the share sale — Deutsche Bank, UBS and Citigroup — have an option to buy $86 million stock in the next 30 days.
The new shares take proceeds from Melco PBL Entertainment’s listing on the US Nasdaq market to $2.2 billion, which will go towards building two casinos — City of Dreams and the Trinity — and a hotel in Macau, Asia’s gambling capital.
Together with Crown Macau, the company plans to have three casinos in Macau by 2009.
The share sale will water down the stake PBL owns in the Macau gaming venture to as much as 37.4 per cent, from 41.4 per cent currently. Melco will experience the same dilution.
The extra shares on issue pushed down the stock prices of Melco PBL Entertainment and PBL. PBL shares yesterday closed down 35¢ at $20.55 on the local exchange.
Hong Kong-based Credit Suisse gaming analyst Gabriel Chan said the shortfall indicated investors were wary because of market jitters triggered by poor results this week at larger Macau rival Las Vegas Sands.
Mr Chan said Melco PBL was willing to accept a $130 million shortfall in return for a speedy capital raising.
“I think they needed the money urgently,” he said, referring to the initial plans for the raising.
On Thursday Melco PBL shares closed down $US1.35 at $14.55.
Technorati Tags: City of Dreams, Crown Macau, Entertainment, macau, Macau Gaming, Melco PBL
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