As reported recently by several local news outlets, one of the most renowned Macau-based casino operators, the MGM China Holdings Limited company has announced some of its future plans following the recent mandatory shutdown of its casino venues due to the ongoing coronavirus pandemic. As reported, MGM China Holdings Limited has been granted a brand-new credit facility which the company will use to help its business operations survive the negative financial impact of the coronavirus pandemic-related shutdown.
According to reports released by GGRAsia and Inside Asian Gaming, MGM China Holdings Limited used one of his latest official press releases to share more details about its new credit facility. As revealed, the credit provision which the company has agreed with its lenders is worth over $301 million. Nonetheless, this value may go over $503 million under specific conditions if necessary, to help the company stay afloat and to help its business survive.
Details About MGM China Holdings Limited
The MGM China Holdings Limited firm is one of the most prominent hospitality companies in Asia. In fact, the company is one of the leading operators, owners, and developers of lodging and gaming resorts in China. Moreover, MGM China Holdings Limited is also the holding firm of MGM Grand Paradise which is one of the six operators that has been granted the necessary rights to own and operate casino gambling venues in the Asian capital city of gambling, Macau.
When it comes to the MGM Grand Paradise firm, it owns and manages one of the most iconic casino facilities in Macau, MGM Macau. The venue is the award-winning fully integrated casino gaming resort situated on the Macau Peninsula. The company also owns and operates MGM Cotai that is a fully integrated, luxury resort located in Cotai which opened its doors back in 2018.
The company’s MGM Macau offers around six hundred hotel rooms alongside many other luxury amenities including five-star hotel suits, the MGM Art Space as well as, conference and meeting areas, fine dining restaurants, and one of the biggest casino floors in Macau. MGM Cotai is no less impressive packed with one thousand and four hundred luxury hotel suites and rooms, a high-end spa, meeting space, food and beverage outlets, and much more for the ultimate gaming and entertainment experience.
Disappointing First-Quarter Revenues
Due to the ongoing coronavirus pandemic and related negative and even devastating financial impacts, the MGM China Holdings Limited company saw aggregated gross net revenues for its MGM Cotai and MGM Macau venues drop by around 63% on a yearly basis to reach around $270.91 million in the first four months of 2020. At the same time, the company’s associated earnings before amortization, depreciation, taxes, and interest hit a massive deficit of around $12.9 million.
One of the major reasons behind such disappointing first-quarter net revenues related to travel restrictions which were put in place by the government of Macau following mandatory casino lockdowns issued back in March. Travel restrictions alongside mandatory lockdowns have caused MGM Cotai and MGM Macau’s occupancy rate to drop to around 36%. Consequently, the company in charge burned around $1.5 million every single day.
Majority owned by the MGM Resorts International company which is an American casino operator, the MGM China Holdings Limited company also shared that it will probably access its new credit facility provision as soon as it provides the necessary evidence that all of its $1.25 billion senior credit facility has been exhausted. According to the company’s officials, its latest cash provision is also subject to fluctuating annual interest rates as grounded on the HIBOR or the Hong Kong Interbank Offered Rate alongside a 2.75% margin according to the company’s leverage ratio.