Melco China Resorts announces significant private placement and update on Beidahu



    BEIJING, Aug. 20 /CNW/ - Melco China Resorts (Holding) Limited (TSXV:
MCG) ("Melco China Resorts" or the "Company"), is pleased to announce that it
has entered into a definitive agreement with China Entertainment Globe Ltd.
("CEG") in which CEG will subscribe for 95,000,000 common shares at a
subscription price of $0.15 for a total subscription price of $14,250,000 (the
"Private Placement"). CEG will subscribe for approximately 49.8% of the equity
interest of the Company (on an enlarged basis and assuming the conversion of
Melco China Resorts' outstanding Class B non-voting shares).
    The subscription by CEG is expected to close on the business day
following the notice of satisfaction of all of the closing conditions set
forth in the subscription agreement and binding letter agreement (collectively
the "Definitive Agreements") entered into by the Company and CEG on August 20,
2009. The Private Placement is expected to complete by the end of September
2009. The Definitive Agreements will be available electronically on
www.sedar.com.
    The Definitive Agreements provide that the proceeds of the Private
Placement will be applied for the use of Melco China Resorts' subsidiaries and
projects in the People's Republic of China, except for payment of costs, fees
and general administration expenses in Melco China Resorts.
    On July 15, 2009 Jilin Beidahu Sports and Tourism Industry Development
Company Limited (the "Vendor") served formal notice to Melco China Resorts
that the acquisition agreement entered into between the Company and the Vendor
for the Sky Mountain Beidahu Resort ("Beidahu") would be terminated pursuant
to its terms as the Company has failed to pay the RMB70 million payment which
was due on December 31, 2008; and on July 31, 2009 the Vendor reconfirmed it's
notice to terminate the acquisition agreement. In this relation, the Company
filed a confidential material change report to the applicable regulatory
authorities on August 10, 2009. Melco China Resorts has been negotiating with
the Vendor and will work closely with CEG with an aim to retain this resort
but there can be no guarantees that it shall be successful.
    CEG has agreed to work closely with Melco China Resorts' management and
provide its expertise and networks in connection with (i) Melco China Resorts'
real estate development and sales; (ii) renewal of Melco China Resorts' Harbin
Bank loan, and (iii) discussions with the Jilin Government in connection with
Melco China Resorts' retention of the Beidahu resort and project. Further, CEG
has agreed to arrange third party(ies) to provide RMB funding directly to
Melco China Resorts' subsidiaries with an aim to provide sufficient funding to
meet their current development and operating obligations on terms to be agreed
and acceptable to the board of directors of Melco China Resorts.
    Melco China Resorts has agreed to exclusively deal with CEG subject to
the directors of the Company being permitted to fulfill their fiduciary duties
to Melco China Resorts.

    The Private Placement is subject to the fulfillment of a number of
closing conditions, in addition to customary closing conditions, including:

    
    -   conditional approval of the TSXV and any other applicable regulatory
        authority;

    -   receipt of an irrevocable written consent to the Private Placement
        from shareholders of Melco China Resorts representing more than 50%
        of the issued common shares (excluding any common shares held by
        CEG);

    -   Melco Leisure and Entertainment Group Limited ("Melco Leisure") shall
        have converted its Class B non-voting shares in the capital of Melco
        China Resorts to common shares;

    -   Melco Leisure shall have agreed to extend the maturity of its
        existing US$23 million aggregate principal amount in loans to Melco
        China Resorts (the "Shareholder Loans") to March 31, 2013 or a later
        date such that the Shareholder Loans will no longer be due on demand
        (except on an event of default) and shall accrue interest at the rate
        of 3-month LIBOR plus three (3%) percent, provided that Melco Leisure
        will have waived all applicable change of control provisions and
        Melco Leisure will have the right to approve certain material
        corporate and operational matters of Melco China Resorts, as is
        customary for a lender and on terms acceptable to CEG, acting
        reasonably; and

    -   Melco Leisure, CEG and Melco China Resorts shall have executed a
        binding agreement covering, without limitation, the following matters
        concerning Melco China Resorts: (i) repayment of the loan in the
        principal of US$1.5 million and RMB11.375m respectively extended by
        Melco Leisure and Melco International Investment Consultancy
        (Beijing) Co. Ltd. to Melco China Resorts (or its subsidiary as the
        case may be) in accordance with their terms without triggering any
        default or additional payments or further consideration; provided
        this transaction does not trigger a default under the loan
        agreements; and (ii) so long as any part of the Shareholder Loans are
        outstanding and Melco Leisure owns at least 10% of the issued and
        outstanding voting securities of Melco China Resorts, Melco Leisure
        will have the right to nominate one director to the board of Melco
        China Resorts.
    

    In addition, CEG will have the right to terminate the Definitive
Agreements in a number of events including in the event of a breach of any
representations, warranties or covenants of the Company, a material adverse
effect or any regulatory intervention which would prevent or restrict the
trading in the Company's shares.
    CEG will be permitted to conduct further due diligence until the closing
of the Private Placement to confirm the accuracy of the representations and
warranties of the Company in the Definitive Agreements or other agreements
entered into by CEG and the Company.
    CEG has provided to Melco China Resorts satisfactory funding proof for
the subscription under the Private Placement.
    Upon Closing the Company will pay an agency fee to a third party acting
as agent on behalf of the Company. The agent will be entitled to an amount
equal to 5% of the Purchase Price (which amount, if reduced, shall be
disclosed prior to the closing of the Private Placement). Such compensation
would be provided from funds advanced from CEG.
    Upon closing of the Private Placement, Melco China Resorts will procure
(in consultation with CEG) the resignation of six (including three independent
directors) of the seven current Melco China Resorts board members to be
replaced with: (i) two nominees of CEG to be the independent directors (in
consultation with the remaining Melco China Resorts Board member) and (ii) up
to four executives of CEG to be non-independent/executive directors; the
remaining Melco China Resorts Board member may nominate one more candidate to
be the additional director; provided that in all such circumstances Melco
China Resorts continues to comply with its notice of articles and articles and
applicable regulatory requirements in respect of the composition of the Melco
China Resorts board of directors and that Melco China Resorts maintains at
least two independent directors (within the meaning of applicable securities
laws). Any such director appointment will be subject to TSXV approval.
    The Private Placement can be terminated by either party if the closing of
the Private Placement has not occurred on or prior to the date that is sixty
(60) days from the date of the signing of the Definitive Agreements, except
that the right to terminate the Definitive Agreement will not be available to
any party whose breach of the Definitive Agreement has been the cause of, or
resulted in, the failure of the closing of the Private Placement.
    Within 6 months after closing of the Private Placement, the legal name of
Melco China Resorts will be changed to another name without bearing the word
"Melco", subject to applicable laws and availability of the name. Melco China
Resorts and its subsidiaries shall not be allowed to use the name "Melco"
anymore. All trademarks registered or under application by the Company or its
subsidiaries bearing the words "Melco" in English or Chinese will be assigned
to Melco Leisure or its nominees at nominal consideration as soon as
practicable.

    About Melco China Resorts

    Melco China Resorts currently operates China's two largest premier
destination mountain resort properties, the Sun Mountain Yabuli resort, host
of the 2009 World University Games and the Sky Mountain Beidahu resort. Melco
China Resorts is transforming these properties into world-class, four seasons
luxury mountain resorts with excellent real estate investment opportunities
for discerning buyers. Melco China Resorts' leadership team boasts a proven
record of resort development success both internationally and in China.
www.melcochinaresorts.com
    Sun Mountain Yabuli www.sunmountainyabuli.com/en/
    Sky Mountain Beidahu www.skymountainbeidahu.com/

    About China Entertainment Globe Ltd.

    China Entertainment Globe Ltd. ("CEG") is a private Hong Kong based
company involved with the investment in, and development of, resort projects
in the People's Republic of China. The Company has interests in resort and
leisure projects across China in Guangxi, Yunan, Hubei, and Xinjiang
provinces. CEG's principals have a successful record of real estate and golf
development in China as well as significant leisure redevelopments of major
cultural importance in the country including the renowned world heritage
projects of Pingyao, Lijiang, and Shanghai M50.

    
    The TSX Venture Exchange has neither approved nor disapproved the
    contents of this press release.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.
    

    FORWARD LOOKING INFORMATION

    Information in this press release that is not current or historical
factual information may constitute forward-looking information within the
meaning of securities laws, and actual results may vary from the
forward-looking information. Implicit in this information are assumptions
regarding future operations, plans, expectations, anticipations, estimates and
intentions, such as the plans to develop the ski resorts in China and the
ability of the Company to satisfy the conditions to closing of the Private
Placement. These assumptions, although considered reasonable by Melco China
Resorts at the time of preparation, may prove to be incorrect. Readers are
cautioned that actual future operating results and economic performance of
Melco China Resorts are subject to a number of risks and uncertainties,
including general economic, market and business conditions, uncertainty
relating to land use rights, adverse industry events for the ski and real
estate industries, Melco China Resorts' ability to make and integrate
acquisitions, the requirements of recent Chinese regulations relating to
cross-border mergers and acquisitions, the inability to obtain required
approvals or approvals may be subject to conditions that are unacceptable to
the parties, changing industry and government regulation, as well as Melco
China Resorts' ability to implement its business strategies, dispose of assets
or raise sufficient capital, seasonality, weather conditions, competition,
currency fluctuations and other risks, and could differ materially from what
is currently expected as set out above.
    Forward-looking information contained in this press release is based on
current estimates, expectations and projections, which Melco China Resorts
believes are reasonable as of the date of this press release. Melco China
Resorts uses forward-looking statements because it believes such statements
provide useful information with respect to the operation and financial
performance of Melco China Resorts, and cautions readers that the information
may not be appropriate for other purposes. Readers should not place undue
importance on forward-looking information and should not rely upon this
information as of any other date. While Melco China Resorts may elect to, it
does not undertake to update this information at any particular time.

    %SEDAR: 00008944E




For further information:

For further information: Melco China Resorts, Investor Relations, Kevin
O'Connor or Ali Mahdavi, Tel: (416) 962-3300, Fax: (416) 962-3301, Email:
investor_relations@melcochinaresorts.com

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MELCO CHINA RESORTS (HOLDING) LIMITED

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