SJM staff costs could increase by up to HK $ 600 million (US $ 76.4 million) in the second half of this year as game staff are absorbed from satellite casinos to Fitch Ratings under license.
Rating agencies issued a statement in a dispatch that downgraded SJM Holdings’ long-term foreign currency issuer’s default rating and senior unsecured rating from “BB” to “BB-“.
SJM recently agreed to acquire Casino Oceanus from its parent company, Social de de Turismoe Diversões de Macau (STDM), for HK $ 1.9 billion. This is to comply with new gaming laws that require concession owners to return the casino and related equipment to the Macau government. Of the concession period.
The consideration is settled by issuing a five-year convertible bond to STDM, but Fitch saw the “limited risk” of buying a third-party self-employed casino on a larger scale.
Approximately 14 of all third-party advertised casinos on the SAR are operated under SJM game licenses.
The Grand Emperor Hotel Casino was previously scheduled to close on June 26th, but after the agreement between hotel owner Emperor Entertainment Hotel Limited and SJM, the casino will continue to operate until December 31st.
The two satellite casinos at Macau Fisherman’s Wharf will also be open until at least December 31st. This was previously revealed by Macau Legend CEO Melindacha, as the contract with Game Concessionaire SJM was also extended for six months.
Angela Leong On Kei, co-chair and managing director of game operator SJM, said the group absorbed workers who were unemployed due to the closure of a satellite casino linked to the game concessioner after repeated labor authorities took the necessary responsibilities to the concessionaire. Guaranteed to do diligence to protect the rights of dismissed satellite casino workers.
Game operators reported a negative adjustment EBITDA of HK $ 1.5 billion in 2021, bringing total employee benefits to HK $ 6.1 billion.
Nevertheless, operators recently received the necessary approvals from banks and the Game Inspection and Coordination Authority (DICJ) for refinancing HK $ 19 billion (US $ 2.4 billion) syndicated loans.
‘[SJM] We plan to withdraw funds by the end of June. Refinancing will boost liquidity by HK $ 5.7 billion after repaying a HK $ 13.3 billion loan due in February 2023.
Rating agencies estimate that HK $ 4.2 billion will be available for working capital after HK $ 1.5 billion is allocated to the construction of the Grand Lisboa Palace.
‘Assuming an EBITDA loss of HK $ 2 billion, maintenance equipment investment of HK $ 500 million and annual interest expense of HK $ 800 million, it will fund operations in the second half of 2011, even if the operating environment does not improve. Should be enough for. SJMH also states that its parent, STDM, is ready to provide up to HK $ 5 billion in financial support as needed.
However, Fitch Ratings estimates that SJM’s net revenue baseline will recover to just 27% of the 2019 level in 2022, and the EBITDA margin will gradually recover to 2019 levels by 2025. ..
