Majestic Research

Bloomberg

Melco Shares Rise on Company's Confidence over Loan

By Oliver Staley
Published: August 17, 2007

Melco PBL Entertainment (Macau) Ltd. shares jumped as much as 16 percent after executives said they expected to get financing for the company’s City of Dreams casino within two weeks.

Melco’s American depositary receipts rose $1.73 to $11.83 at 3:10 p.m. New York time in Nasdaq Stock Market composite trading. The shares have fallen 39 percent since they were sold to the public Dec. 18.

The Hong Kong-based casino owner fell 24 percent this week through Thursday on concerns that the global credit turmoil was hindering attempts to arrange a $2.75 billion loan for its projects in Macau, China.

“A lot of companies in Macau are going to need financing to get their projects open,” said Matthew Jacob, an analyst with Majestic Research in New York. “Being able to reassure investors that management is able to move forward may give investors some confidence.”

Chief Financial Officer Simon Dewhurst said in a conference call with investors today that he was “confident” banks will lend the company money in the next two weeks.

Melco, which opened the $500 million Crown Casino in Macau May 8, is a joint venture between James Packer, Australia’s richest man, and Lawrence Ho, the son of billionaire Stanley Ho. The company plans to open the $2.1 billion City of Dreams, which will feature an underwater casino, on Macau’s Cotai Strip by the end of next year.