CR85-p72-Business 1:SJC-Casino Review 24/10/09 15:34 Page 1
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Gambling revenues fall across the US
A new report by the Rockefeller Institute of Government says that
revenues derived by state and local bodies in the US from legal
gambling fell by 2.6 per cent in 2008/9. The largest source, state
https://www.igt.com
lotteries, saw a 2.3 per cent decline while the second largest,
casinos, generated 8.5 per cent less. The Institute said that
increasing gambling to boost tax revenues will only work as a short-
Business
term measure and won’t cover normal increases in general spending.
NEWS
Wynn Macau
raises $1.6bn
in top price IPO
Indicative of the confidence that is once again growing in the
Macau market, the IPO for a quarter of the business made by
Wynn Macau on the Hong Kong Stock Exchange was
snapped up even at a premium price.
wynningways around ten per cent of the about the rates at which the
WYNN MACAU available shares. new shares will actually
The company had trade. Given the high price of
Steve Wynn has demon- expected to sell around a 20 the shares at the outset, some
strated his Midas touch again per cent stake for about analysts were predicting that
with what many thought was US$1bn (E678m) but the the share value would either
a vastly risky Initial Public demand persuaded it to remain at the same level as
Offering in Hong Kong bring- increase the equity available the wider market obtained
ing in US$1.6bn (E1.01bn) to and bump up the price. access to them, or indeed fall
help fund the company’s con- The IPO values the new in value. However, the over- record of US$1.4bn (E949m) Las Vegas Sands
tinued expansion of it Macau subsidiary Wynn Macau at up subscription to the shares adding to a good July with will be looking at
operations and bring it a to 14.5 times its projected implies considerable enthu- September expected also to Wynn Macau’s
measure of independence EBITDA for 2010, according siasm among investors even show vast improvement on flotation success
from its parent company to some analysts: shares in at the top of the range. last year’s figures after the with interest, as the
Wynn Resorts. other floated companies in Aside from the resilience lifting of travel restrictions. company looks
Wynn Macau easily found the territory are trading at that Wynn has shown during That, combined with the cap itself towards the
buyers for the 1.25bn shares significantly less - about 11 the downturn, managing to now in place on junket com- Hong Kong Stock
priced at HK$10.08 (about times projected earnings in keep its venues attractive missions, which will imme- Exchange to help
US$1.30 or E0.88) each, the case of Melco Interna- and competitive, and its deft diately go to improve it finance its
right at the top of its previ- tional at Galaxy Entertain- dealing at a time when credit operators’ bottom lines, ongoing projects
ously announced range of ment and just over nine times has been hard to come by, mean that the expectation in Macau. Whether investors The soundness of
HK$8.52 to HK$10.08. The projected earnings in the the market in Macau is now is that even though the will consider Las Vegas Sands,
Wynn’s approach
IPO to institutional case of SJM Holdings. showing definite signs of first half of 2009 showed a which in the Venetian Macau
combined with a
investors was more than ten While Wynn Macau has picking up. Gross gaming 12 per cent decline com- operates the largest casino in
vastly improving
market in Macau
times oversubscribed and certainly been encouraged revenues for the entire sector pared to the previous year, the world, so sound a
has helped the
closed early. Retail investors by the successful flotation, rose in August by 17 per cent the annual results will show prospect as Wynn Macau
company pull off
only managed to secure there has been pessimism year-on-year to a monthly good growth. remains to be seen. a successful IPO
WMS finds future finance
QLI to delist
from AIM
fullyfunded been raised from $100m between 25 to 50 basis points, tions, giving it much greater checkingout
WMS INDUSTRIES (E69.7m) to $150m (E103m). according to the debt ratio. financial flexibility. QUEENCO LEISURE
Depending on WMS’s debt As the company’s results Scott Schweinfurth, CFO of
The confidence WMS has in ratio, the interest payments on have proven strong and the WMS, commented: “This The Israeli casino developer and operator
its rejuvenated product line funds borrowed under the facil- balance sheet remains healthy, amended credit facility provides Queenco Leisure International, which is listed
has been backed up firmly by ity will range from 200 to 275 WMS has also managed to nego- WMS with an excellent financial on the London Stock Exchange’s Alternative
its bankers through the basis points above LIBOR. The tiate favourable resource for additional liquidity Investment Market (AIM), is to merge with its
amendment and expansion of unborrowed portion of the facil- changes to the and flexibility to pursue oppor- parent company YZ Queenco and thereby
WMS’s unsecured revolving ity will be charged at former limita- tunities…With this agreement, delist itself from the exchange, the Israeli
credit facility. tions on permit- we are able to sustain our strong business press has reported.
The Illinois-based ted indebtedness, financial position at a reason- The company went public only in 2007 in
company has announced that liens, invest- able cost. We value the confi- order to raise capital for expansion: with its
the facility provided by a ments, loans, dence placed in WMS and our key business partner Casinos Austria
consortium of five banks, advances long-term plans for continued International, other projects it expanded
which had been due to and acquisi- profitable growth.” include its operations at the Club Hotel
expire at the end of Decem- Casino Loutraki and the development of the
ber this year,
With
confidence
Casino Beograd. It also operates Casino
is now
brimming, WMS
Palace in the Romanian capital Bucharest
extended
has found the
and Casino Rodos in Greece. However, since
until the end of financing deal the IPO the company’s shares have lost
September
it needs
almost 80 per cent of their value.
2012. At the A merger is the easiest way to achieve the
same time, the delisting as the unquoted parent company
credit limit has has no separate activities.
72 November 2009 • businessnews
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