MANILA - Holding company Melco Crown (Philippines) Resorts Corp said it will raise P5.5 billion ($125 million) to fund its City of Dreams Manila casino project by issuing new shares to its controlling shareholder, MCE (Philippines) Investments Ltd.
In a two-step transaction, MCE's new shares will replace stock it sold overnight in a private placement to an unidentified investor, Melco Philippines said on Thursday.
The new shares mean MCE's holding will be diluted to 65.29 percent of Melco Philippines from 72.45 percent before the transaction.
MCE sold 485.177 million shares at P11.30 apiece in its overnight placement, representing a discount of 7 percent to the previous closing market price. The shares were equal to a 9.88 percent stake in Melco Philippines.
In the second step of the transaction, MCE will subscribe to exactly the same number of Melco Philippines shares to be issued at the same offer price, a stock exchange filing said.
Shares of Melco Philippines were suspended from trading on Wednesday ahead of the fund-raising announcement. Trading was scheduled to resume at 10 a.m. 0200 GMT on Thursday.
The stock last traded at 12.18 pesos before the voluntary trading suspension.
On Wednesday Melco Philippines said its board had approved an increase in the total budget for City of Dreams project to about P37 billion from about P28 billion previously.
The City of Dreams Manila, scheduled to open this year, is part of the $1.3 billion integrated casino resort that Melco Crown Entertainment Ltd will open this year in Entertainment City, Manila's version of Las Vegas gaming strip.