Popular casino operator Melco Crown Entertainment Ltd. announced its decision to remove its shares from the Hong Kong Stock Exchange. The company pointed to “cost and utility” as the main reason for this step.
On Friday, January 2, the Macau-based gaming operator filed an application for its voluntary withdrawal.
The company stated in a special filing that it will keep the listing of American Depository Shares (ADSs) on the NASDAQ Stock Market. Yet, it did not give specific information on when the delisting will take place.
Back in 2014, the price of Melco Crown’s stocks on the Hong Kong Stock Exchange dropped by 35%. They reached HK$65.75 or US$8.48 per share towards the end of the year. Yesterday, January 2, the company’s shares fell 2.7%.
Currently, the gaming operator is working on the expansion of its City of Dreams casino resort on the Cotai Strip. What is more, it is busy with the construction of Studio City, which is planned to open doors sometime in the middle of 2015. Melco Crown is also a major partner in City of Dreams Manila, a multimillion project that had its soft launch in mid-December.
After the delisting takes place, shareholders in the company will be given the opportunity to either keep their shares or to convert those into ADSs.
The Macau-based casino operator pointed out that one of the main reasons for its decision to leave the Hong Kong Stock Exchange is the fact that trading volume on that particular market is “very limited”. In addition, the company said that Hong Kong did not offer many opportunities so as for it to be able to raise its equity capital.
Melco Crown also shared that the maintenance of shares in Hong Kong involved extra costs and additional administrative procedures.
The company needs the approval of its shareholders so as to be able to leave Hong Kong. An approval from the listing committee of the stock exchange is also necessary.
All six gaming operators that hold casino licenses in Macau are listed on the Hong Kong Stock Exchange. Melco Crown is the only one that is listed on the NASDAQ Stock Market as well.
The company listed its ADSs on the NASDAQ Global Market back in December 2006. Since January 2009, they have been traded on the NASDAQ Global Select Market. It is good to mention that each ADS stands for a total of three shares.
On November 30, 2011, Melco Crown announced its dual primary listing by means of introduction on the main board of the Hong Kong Stock Exchange.
In December 2014, the company was removed from the NASDAQ Q-50 Index. The reason for this was its not so satisfactory performance on the stock market.
