MGM Cotai to Meet Launch Deadline despite Typhoon Hato Devastation

MGM China Holdings Ltd., a major gambling operator, disclosed the company expects to succeed with meeting the deadline for the opening of its multi-billion integrated casino resort MGM Cotai in Macau despite the devastating destruction brought about by typhoon Hato which ravaged the city this past August.

The Chief Executive Officer of MGM China Holdings Ltd. Grant Bowie revealed the company is moving forward with its HK$26-billion project despite the severe hit Macau took from the typhoon. Mr. Bowie explained that the devastated city is already returning to normality despite the destruction the typhoon caused.

Back in April 2017, Jim Murren, the Chairman and Chief Executive of MGM Resorts International, the parent company of the Macau-licensed MGM China Holdings Ltd., announced that the opening of the MGM Cotai casino resort was expected to take place after the end of the Golden Week. Murren was referring to China’s national holiday period at the beginning of October but the parent company’s governance had already stressed on several other occasions that the opening of MGM Cotai was planned for the second half of the year.

Mr. Bowie also explained that receiving the necessary approvals on the resort’s construction work from the Macau government was a deciding factor in meeting the launch deadline determined by the MGM Resorts International.

Other Resorts May Face Construction Delays Following the Typhoon

The same cannot be said about other gambling operators planning to open integrated casino resorts on Macau’s Cotai Strip. Such is the case with the company SJM Holdings Ltd. which was already struggling with meeting the deadline for the launch of its HK$36-billion resort Grand Lisboa Palace that was scheduled for completion in the second half of 2018. In fact, SJM Holdings had experienced delays before typhoon Hato hit. Building work on the Grand Lisboa Palace was suspended for 44 days by the local government after an unfortunate accident that resulted in a construction worker’s death this June.

A similar accident affected the construction of another major project on the Cotai Strip, the US$1-billion Morpheus, the fifth hotel tower of the mega-sized City of Dreams Macau resort, owned and operated by Melco Crown Entertainment. The death of a construction worker in July caused a 13-day delay in the tower’s construction but the Chairman of Melco Crown Entertainment, Lawrence Ho Yau Lung commented this accident is unlikely to lead to delays in Morpheus’ construction. As of August 25, however, the 2,000 workers involved in Morpheus’ construction were reassigned to assist with the recovery efforts of the government, following the typhoon. This may affect negatively Morpheus’ construction timetable.

Macau Suffered Major Losses due to Hato

Asia’s gambling hub suffered substantial economic losses after typhoon Hato hit the city in August. The Chief Executive of Macau Fernando Chiu Sai On revealed at a press conference yesterday that the direct economic cost of the typhoon stands at MOP$8.31 billion. Small and medium enterprises faced MOP$3.36 billion in losses alone.

The typhoon struck Macau on August 23 to take the lives of 10 people and cause as many as 240 injuries. Hato claimed the record of the worst storm to hit Macau in the last 53 years, with wind speeds reaching 124 mph. The destruction it brought about impeded transportation and hindered the relief efforts of the government. The flooding also resulted in power outages and interruptions in the water supply.

The devastation the city of Macau faced caused several gambling operators with local licenses to launch a relief program in order to help the small and medium enterprises affected by the storm. MGM China Holdings led the relief program and conducted a survey involving over 200 of its enterprises in order to evaluate the storm’s impact on their business. The survey established that as much as 60% of the small and medium enterprises of MGM China have received a severe economic blow by the typhoon.

Six major gambling companies operating in the city have promised to donate a total of MOP$215 million to aid the relief efforts of the local government. MGM China, its parent MGM Resorts International and Pansy Ho Chiu King, a shareholder in MGM China have donated MOP$30 million. The casino operators have also reassigned members of their staff to help the Macau community clean up after the typhoon.

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