Macau-based casino operator Melco Crown Entertainment has applied to delist its shares from the Hong Kong Stock Exchange, saying its listing on the exchange limits its opportunity to raise funds. The company is listed on Nasdaq in the U.S.
“We intend to retain the primary listing of ADSs (American depository shares) on the Nasdaq following the proposed delisting,” the firm said in a filing.
Sources told Yogonet that Melco’s listing in Hong Kong is imposing costly compliance obligations, and according to the filing, the delisting is necessary to generate “appropriate opportunities to raise additional equity in Hong Kong,” citing the “very limited” volume of trading on the exchange. The company said its continued listing on the exchange “requires additional ongoing regulatory compliance obligations, and such requirements involve significant additional costs and administrative burden.”
The request to delist comes only three years after the company listed itself on the Hong Kong exchange. The firm’s Hong Kong stocks posted a price drop of 35 percent during 2014, ending the year at HKD65.75 (US$8.48). On the day of the announcement, Melco Crown’s shares dropped by 2.7 percent in Hong Kong trading.
In Macau, the firm is expanding the City of Dreams casino resort and building Studio City, due to open in mid-2015. The company’s City of Dreams in Manila, The Philippines, had a soft opening last month.
After the delisting, existing Melco Crown shareholders will have the option of either keeping the shares or converting them into ADSs, which will continue to be traded on the Nasdaq in the U.S.
