Sources told GGB News last week that Melco Crown Entertainment would take over the Macau Studio City project, which has been stalled for years by a lack of financing and disputes among the partners. Melco currently operates the Altira in the Taipa area of Macau and the City of Dreams in Cotai. Macau Studio City was to have operated as a sub-concession to Melco’s license.

The sources confirmed a report issued last week by David Bain at Sterne Agee, which stated that Melco would buy the equity owned by the majority partner in Studio City, eSun. Macau Studio City was one of the first resorts approved by the Macau government but has not progressed beyond the initial construction. The $2.4 billion project was to have included a live television studio and many entertainment amenities. The site is strategically located at the Lotus Bridge immigration point. Brands that were scheduled to participate in the project included Marriot, Ritz Carlton and Playboy, but once the project stalled, all agreements lapsed. Playboy is now operating at the Sands Macao, and Ritz Carlton and Marriott are rumored to be in negotiations to brand the hotels on sites 5 and 6 owned by Las Vegas Sands and scheduled to open in 2012.

Macau Studio City is a partnership between eSun and CapitaLand. New Cotai Entertainment reportedly paid the partnership HK$1.3 billion (US$167 million) to develop a casino at Studio City. The partners have been in litigation, the latest being a suit brought by New Cotai late last year seeking reimbursement and other damages. The suit, along with others, are still pending.

Melco Crown co-CEO Lawrence Ho has been negotiating with the partners for some time and last week reportedly came to an agreement. Details are unknown at this time, but the bottom line is that the property will be majority owned by Melco, with CapitaLand and New Cotai continuing to be involved, according to Sterne Agee.

Melco Crown is a partnership between Ho and Australia’s Crown Casinos, controlled by media magnate Jamie Packer.

Maybe not so coincidentally, Melco Crown last week completed allocations for its $1.2 billion loan, according to sources, which consists of an $800 million term loan and a $400 million revolving credit facility. A coalition of 13 banks provided the loan. The company said the funding would be used for “general purposes.”

The company has also recently finalized a $350 million bond offering. Proceeds from that sale will be used in part to fund acquisitions and repay debt, the company said in a press release.

While it is unclear what approvals a re-started Studio City would need, it only adds to the confusion of what project will next be green-lighted by the Macau government now that Galaxy Macau is open and Las Vegas Sands’ sites 5 and 6 are scheduled to open next year. Competitors include Wynn Macau’s Cotai project, another by MGM China and a third by market leader, SJM. Wynn is reportedly seeking to acquire adjacent land to expand its casino site now that Chairman Steve Wynn has begun the design process. SJM is also reportedly the sites 7 and 8, formerly claimed by Las Vegas Sands and rejected by the Macau government, after the company failed to file for the land prior to the deadline.

By Staff