This comes as tycoon Lawrence Ho's Melco Resorts explores strategic options, which may include the possible sale of City of Dreams Manila, amid an industrywide slowdown in land-based casinos due to China’s travel restrictions and a decline in Chinese high-roller visits.
“We already waived our right of first refusal,” a source with direct knowledge of the matter told InsiderPH.
A right of first refusal gives a party the opportunity to enter a transaction before the owner sells an asset to someone else.
Belle is the landlord of City of Dreams Manila and is co-license holder of Melco Resorts and Entertainment (Philippines) Corp. in the casino.
City of Dreams Manila brand continues for now
The insider noted that Melco wants to retain the brand and management of the $1-billion integrated gaming center, meaning the ideal buyer would be a fund rather than a casino operator.
“The Manila COD [City of Dreams] is their only positive-performing asset,” the insider said. “They just need to raise funds.”
City of Dreams Manila, which sits on a 6.2-hectare property along the bay, booked $133.8 million in revenue during the fourth quarter of last year, an 11-percent increase.
Adjusted earnings before interest, taxes, depreciation and amortization rose 16.4 percent over the same period.
Debt problems
The insider said Melco Entertainment’s debt is driving these moves.
These totaled about $7.2 billion last year, while interest expenses in the fourth quarter reached nearly $120 million, based on its latest financial results.
Net income for 2024 hit $43.5 million, a turnaround from a $326.9 million loss the previous year.
Still, it carries significant liabilities versus liquidity, with cash and available credit at $3.35 billion.
Who’s buying?
A banking insider revealed that there are still no indicative buyers for Melco’s stake, while company insiders acknowledge that selling the asset at a premium won’t be easy in the current market environment.
In a stock exchange filing on Monday, Belle said, “Any buyout of Melco’s interests in COD Manila is not part of Belle’s plans for the immediate future.”
The company is playing its cards close. After all, in business, every player has a price—it’s only a matter of when the right number comes up.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
