Sands China to adjust capital makeup for new gaming licence

Sands China has proposed restructuring the share capital of Venetian Macau to prepare its subsidiary for a new ten-year gaming licence slated to become effective early next year.

Under new rules, the managing director of a gaming company has to be a permanent resident of Macau, and must hold at least 15 per cent of its share capital, which at least stands at MOP5 billion (US$630 million).

According to a filing to the Stock Exchange of Hong Kong this morning, Venetian Macau, a subsidiary of Sands China which provisionally secured a gaming concession last week, has a registered share capital of MOP200 million, with 89.995 per cent of it held by Venetian Venture Development Intermediate, abbreviated as VVDI; and 0.005 per cent by Venetian Concession Holding, or VCH.

Both units are wholly owned by the group.

The remainder is held by Sands China’s senior vice president and chief financial officer Sun MinQi.

The shake-up of capital will see Venetian Macau increase its share capital to the minimum requirement.

Other changes include a reclassification of shares held by VVDI, VCH, and Sun, with those held by the former two now classed as Class A, and the latter as Class B.

Although each Class B share has the same voting power as a Class A share, the group stressed that “it will only have nominal dividends, redemption entitlement and liquidation rights of up to MOP1 for all Class B Shares”.

Sands China will also inject MOP4.8 billion into Venetian Macau, or VM, through the two subsidiaries. Afterwards, VM will then issue and allot a total of 40,700,000 Class A shares at a subscription price of MOP4,070.0 million to VVDI and VCH, and 7,300,000 Class B Shares at a subscription price of MOP730.0 million to Sun.

After the capital injection, the group will, through VVDI and VCH, indirectly hold all Class A shares that represent 85 per cent of the voting rights and 100 per cent of the economic rights in Venetian Macau; while Sun will hold all Class B shares that represent 15 per cent of the voting rights and de minimis economic rights in VM.

Despite the injection of capital, Sands China’s control over 85 per cent of the voting rights in Venetian Macau still makes VM a subsidiary of the group.