BEIJING, Oct. 5 /CNW/ - Melco China Resorts (Holding) Limited (TSXV: MCG) ("Melco China Resorts" or the "Company"), today announced that it has not received from China Entertainment Globe Ltd. ("CEG") the C$14.25 million into escrow, that was required for CEG's subscription for 95 million common shares in the capital of the Company (the "Private Placement"). On September 22, 2009, the Company was informed by CEG that it would not proceed with the Private Placement and as such the Company requested a trading halt of the Company's common shares. CEG was unable to close the Private Placement because one of its financial partners had withdrawn. CEG has advised the Company that it wishes to proceed subject to it being able to replace the financial partner. Over the last two weeks, for which time trading remained halted, the Company has been working with CEG to seek other financial partners and is in continuing discussions. There can be no assurance that any alternative financial partners will be available to CEG, or amended terms will be reached between the Company and CEG, or the Company will complete a financing with CEG.
In addition, the Company announced that the agreement (the "Acquisition Agreement") with the Jilin Beidahu Sports and Tourism Industry Development Company Limited ("Jilin Beidahu Development Zone") dated November 22, 2007 for the acquisition of Sky Mountain Beidahu Resort ("Beidahu") has been terminated. The acquisition terms for Beidahu included an initial payment of RMB 30 million (C$5.4 million) paid on March 1st, 2008, a second installment of RMB 70 million (C$12.6 million) due December 31st, 2008, and a final payment of RMB 120 million (C$21.6 million) due December 31st, 2010.
As previously announced, Jilin Beidahu Development Zone served formal notice to Melco China Resorts that the Acquisition Agreement would be terminated pursuant to its terms as the Company had failed to pay the RMB70 million payment which was due on December 31, 2008. The Company was unsuccessful in renegotiating terms of the Acquisition Agreement to defer the acquisition payments. In connection with the termination of the Acquisition Agreement the Company has received payment of approximately RMB 27 million (C$4.2 million) from Jilin Beidahu Development Zone.
The resolution of the termination of the Acquisition Agreement provides additional liquidity of RMB 27 million to the Company and eliminates the RMB 70 million and RMB 120 million payment obligations, as well as the capital expenditures required for any future expansion. The Company will continue to focus its efforts on the redeveloped Yabuli resort which is currently being readied for its opening of Winter operations in mid November.
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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. 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 MCR 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.
SOURCE MELCO CHINA RESORTS (HOLDING) LIMITED
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: firstname.lastname@example.org