Melco International Development Limited (Melco) has announced in a press release that Melco Crown Entertainment (MCE), which operates City of Dreams and Studio City in Macau, has entered into a share repurchase agreement with Crown Asia Investments Pty. Ltd. (CAI), a wholly-owned subsidiary of Crown Resorts Limited. MCE agreed to repurchase 155 million ordinary shares from CAI for a total of US$800 million (MOP6.39 billion) at a per share price of US$5.2. As a result of the deal the shareholder’s agreement between CWN and Melco International will be amended but Lawrence Ho will remain CEO and classified sole chairman of Melco, while the equity interests of Melco and public shareholders in MCE will be increased to approximately 37.9 per cent and 34.7 per cent. “This is a tremendous milestone for Melco,” Lawrence Ho stated in a press release. “The transaction will meaningfully strengthen Melco’s financial position by incorporating MCE’s full financial contributions into the Group’s portfolio as an accounting subsidiary. It demonstrates Melco’s positive outlook for Macau’s long-term future. It will also enhance the Group’s overall portfolio of high-quality assets and facilitate our efforts in realising Melco’s global expansion vision.” Sanford C. Bernstein considers the deal positive as it “gives control firmly to Lawrence Ho and MCE will maintain a strong liquidity position with over US$1bbillion in cash on hand, out of Studio City and Melco Crown in the Philippines”. “Stabilizing environment” Meclo Crown Entertainment also released its unaudited financial results for the first quarter of 2016. It said its earnings declined to US$40.50 million, or US$0.025 per share. This was a 53.5 per cent drop from US$87.11 million, or US$0.054 per share, in last year’s first quarter. Net revenue for the period amounted to US$1.10 billion, representing an increase of around 5 per cent from US$1.05 billion for the comparable period in 2015. The gaming operator attributes the increase in net revenue to Studio City, which started operations in October last year and City of Dreams Manila, which commenced rolling chip operations in February 2015, partially offset by lower rolling chip revenues and mass market table gaming The management said the mass market was stabilising, revealing the May 1 holiday ignited some positive year-on-year growth, while playing down concerns about the bad debt risk. “April, similar to March, wasn’t a particularly great month, but I think May with Golden Week has started off great; generally, as a company, we think the mass market is stabilising but the VIP segment is still going through structural changes,” said Ho at a conference call last night discussing the first quarter results. “In respect to the bad debt provision, that particular US$18 million, it’s a single incident that related to one junket that operated since 2008 in Altira. I think their last two quarters’ contribution is quite minimal. We use a more prudent way to look into that matter. In respect of the other junkets’ portfolios in MCE, I think we shall categorise it as being more stable; and with contribution from the pit-fall junket operators have actually been increasing in the last few quarters,” said Ted Chan Ying Tat, Melco Crown’s chief operating officer during the conference call. With J.K.