MGM China Holdings has announced plans to invest MOP$4.8 billion (US$594 million) in a subsidiary to qualify for a new Macau casino license.
The move will work to ensure that the subsidiary, MGM Grand Paradise, meets the requirement that licence-holding companies have at least MOP$5 billion in capital.
If the tender is successful, Pansy Ho will continue to lead MGM Grand Paradise for at least another ten years, earning $8 million per year and receiving 730,000 Class B shares.
Ho will also receive incentive payments based on MGM Grand Paradise’s financial performance, up to a maximum of $95 million over the term of the license.
The new Macau gaming regulations require licensees to have a Managing Director with at least 15% of company capital, up from 10% previously.
If the share arrangement is approved, MGM China will own approximately 85% of the unit’s capital and voting rights, Ho 15%, and MGM Resorts International 0.4%.
MGM China disclosed this information in Hong Kong Stock Exchange filings. The company’s Macau rights, which are held through Grand Paradise, are set to expire on December 31.
After extending the concession period from June 2022 to December 2022, the Macau Government recently formed a panel to examine and evaluate bidders for new casino licenses.
The extension was granted to account for a legal period during which future amendments to Macau’s gaming law were ratified.
Sands China, Wynn Macau, MGM China, Galaxy Entertainment, SJM Holdings, and Melco Resorts will have their bids to keep their Macau concessions reviewed by panel members Cheong Weng Chon, Li Wai Nong, Marina Helena de Senna Fernandes, and Adriano Ho.