Melco Resorts To Acquire Full Stake In Cyprus Casino

Melco Resorts To Acquire Full Stake In Cyprus Casino June 26, 2019 June 26, 2019 David Walker
 Industry June 26, 2019 by David Walker

Melco Resorts and Entertainment Ltd, which operates casino resorts in Macau and the Philippines has decided to take full control of the new Mediterranean casino being built in the Republic of Cyprus. The Cyprus casino is being developed by ICR Cyprus Holdings Ltd, an entity that includes local Cyprus companies cooperating to build the new City of Dreams casino.

Hong Kong-listed Melco International has decided to acquire the 75-percent stake in ICR Cyprus Holdings Ltd which it made public through a filing with Nasdaq. Melco Resorts is expected to buy the equity interest in ICR Cyprus, in exchange for 55.5 million ordinary shares in the company, representing approximately $375 million. The deal’s holding involves around 18.5 million of Melco Resorts’ American depositary shares, or about 4% of the company’s outstanding stocks.

In its filing, Melco Resorts clarified that the deal is still pending the approval of Cyprus’ regulatory authorities and a new shareholders’ agreement between the company and the stakeholders who hold the remaining 25 percent in ICR Cyprus. Melco is expected to provide corporate-level management services to the ICR Cyprus consortium for a fixed annual amount of 2 million euros.

Sanford C. Bernstein analysts Kelsey Zhu, Vitaly Umansky, and Eunice Lee estimates that City of Dreams Mediterranean will cost at least $650 million to build and will likely earn a return of investment of 20 percent to 25 percent per management. Melco Resorts disclosed that piling work on the integrated destination resort’s main structure has already been completed.

Temporary Casino Will Close In 2021

The City of Dreams Mediterranean will feature a 7,500-square-meter gaming area that will house more than a thousand state-of-the-art slot machines, 100 gaming tables as well as a premier 500-room five-star hotel. The casino is expected to be opened to the public in 2021 if everything goes as per plan.

ICR Cyprus has secured a 30-year casino gaming license from the Cyprus gaming regulator. The license was issued in Jan 2017 and is expected to boost tourism and revenues in the Greek section of the island.

The ICR Cyprus consortium currently runs one temporary casino and two satellite properties in Cyprus. The temporary casino in Limassol has been in operation since June 2018 and was the first licensed gaming establishment to be allowed to operate on the Eastern Mediterranean country. The temporary property will be shuttered once the City of Dreams Mediterranean becomes fully operational. 

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David is our resident 'down under' contributor, letting us know what is going on in the southern hemisphere, he is also keen blackjack player