$2bn Loan Wanted by MGM China, Expansion on the Cards
MGM China is seeking a $2 billion loan, its first since the pandemic, in order to fuel ambitious expansion plans.
A large loan could boost MGM China’s expansion. © Raten-Kauf, Pixabay
Key Facts:
- Various lenders are said to be in talks with the casino company
- MGM Macau and MGM Cotai casino hotels could be expanded
- Strong finances boost MGM China’s borrowing chances
- Las Vegas Sands recently took out a $9 billion loan to expand a Singapore casino resort
According to a report by Bloomberg, one of the biggest casino companies on the planet, MGM China, intends to expand its MGM Macau and MGM Cotai hotels.
Various lenders are said to be in talks with MGM China over the syndicated loan deal.
Some of the money could also be used as a refinancing tool, with MGM China having around $3 billion of existing debt.
The news comes shortly after rival casino company Las Vegas Sands took out a $9 billion loan to fund expansion plans for its resort in Singapore.
Strong Finances
MGM China is part of the Las Vegas-based MGM Resorts International, which is one of the biggest players in the world of casinos and gambling.
Despite the debt levels at MGM China, the company’s strong finances put it in a good position to access a large loan.
High revenues were confirmed in the last round of financial results released by MGM China.
The company also said it had $2.2 billion in cash, enabling it to access borrowing.
Experts are split on how fast the casino sector could grow in Macau. However, with tourism in this part of the world still rebounding as a result of COVID-19.
This unstable market could prove an issue as MGM China tries to secure its new loan.
Bloomberg reported that a leading international investment bank analyst believed MGM China’s pursuit of a loan would be consistent with the company’s previous financial strategies.
Market Share Rising
In the company’s recent financial results, MGM China said it had hit an all-time market share high of 15.8% in 2024.
This was up from 15.2% in 2023 and compared favourably to the company’s market share of 9.5% in 2019, indicating it is on the up.
Macau had 34.9 million visitors in 2024, which MGM China said was up by 24% from a year ago, while daily visitation reached 95,433.
As this represents a recovery of 88% of pre-COVID levels in 2019, it demonstrates that Macau is again becoming a popular place to go, which could be good news for MGM China.
The president and executive director of MGM China, Kenneth Feng, said: “We are delighted to see the recovery in Macau, along with the diversification development of the city. We are committed to developing Macau into a global and diversified tourist destination through our concession commitments.”
