Melco China Resorts announces significant private placement with Wisecord
Holdings Limited
The subscription by WHL is expected to close on the business day following the satisfaction of all of the closing conditions set forth in the subscription agreement and binding letter agreement (collectively the "Definitive Agreements") entered into by the Company and WHL on
The Definitive Agreements provide that the proceeds of the Private Placement will be applied for the use of Melco
Upon closing of the Private Placement, WHL agrees to work closely with Melco
Melco
The Private Placement is subject to the fulfillment of a number of closing conditions, in addition to customary closing conditions, including:
- conditional approval of the TSXV and any other applicable regulatory authority; and - approval by the board of directors of Melco China Resorts. After signing of the Definitive Agreements, the Company's board of directors has approved the Private Placement. Prior to the closing of the Private Placement, Melco China Resorts shall procure: - receipt of an irrevocable written consent to the Private Placement from shareholders of Melco China Resorts representing more than 50% of the issued Common Shares (excluding any Common Shares held by WHL); and - Melco Leisure shall have converted its Class B non-voting shares in the capital of Melco China Resorts to Common Shares. Further, prior to the closing of the Private Placement, Melco Leisure, WHL and the Company have agreed to each procure, to the largest extent possible within their control, the following: - Melco Leisure, WHL and the Company shall have executed a binding agreement under which, inter alia, Melco Leisure shall agree to extend the maturity of its existing US$23 million aggregate principal amount in loans to Melco China Resorts (the "Shareholder Loans") to March 31, 2013 such that the Shareholder Loans will no longer be due on demand (except on an event of default) and shall accrue interest at the rate of three percent (3%) per annum, provided that: - Melco Leisure will have waived all applicable change of control provisions and Melco Leisure will have the right to approve certain material corporate and operational matters of Melco China Resorts, as is customary for a lender and on terms acceptable to WHL, acting reasonably; - so long as any part of the Shareholder Loans is outstanding and Melco Leisure owns at least 10% of the issued and outstanding voting securities of Melco China Resorts, Melco Leisure will have the right to nominate one director to the board of Melco China Resorts; - at any time before March 31, 2013, if the Company's 30 consecutive day weighted average trading price exceeds C$1.00 per share, WHL has the right to require Melco Leisure to convert all or part of the Shareholder Loans at 50% discount plus accrued interest at a price (the "Conversion Price") equal to (a) 70% of the said weighted average trading price or (b) C$1.00 whichever is greater; and - WHL will have a call option to buy 1/3 (one-third) of the converted shares referred to in the preceding subparagraph from Melco Leisure at the Conversion Price within 30 days of the conversion; and - Melco Leisure, WHL and Melco China Resorts shall have executed a binding agreement in relation to the settlement of the US$1.5 million loan ("Melco Leisure US$1.5 million Loan") from Melco Leisure to the Company or its subsidiary, which shall provide US$1 million of the loan to be converted into Common Shares of the Company at C$0.15 per common share simultaneously with the closing of the Private Placement and US$0.5 million of the loan to be re- paid to Melco Leisure in cash.
In addition, WHL will have the right to terminate the Definitive Agreements in a number of events including in the event of a material change, change to a material fact, or there exists any fact or circumstance not generally disclosed to the public or WHL which in the opinion of WHL could have a material adverse effect on the market price or value of the Company's Common Shares (excluding certain "Exclusion Events" as defined in the Definitive Agreements) or in the event of any regulatory intervention which would prevent or restrict the trading in the Company's Common Shares.
The Private Placement can be terminated by either the Company or WHL if the closing of the Private Placement has not occurred on or prior to the date that is thirty (30) days from the date of the signing of the Definitive Agreements, or seven (7) days from the date of obtaining the approval of the TSXV and any other regulatory authority having jurisdiction with respect of the Company (whichever is earlier) or such other date as the parties shall agree to in writing, except that the right to terminate the Definitive Agreement will not be available to any party whose breach of the Definitive Agreement has been the cause of, or resulted in, the failure of the closing of the Private Placement.
WHL has provided to Melco
Upon closing of the Private Placement, Melco
- there will be nine (9) Melco China Resorts board members in total, comprised of six (6) non-independent directors and three (3) independent directors; - the resignation of two of the four current non-independent / executive directors of the Company to be replaced with 2 nominees of WHL; and - the appointment of additional two (2) persons to be nominated by WHL as the non-independent / executive directors of the Company;
provided that in all such circumstances Melco
Within 6 months after closing of the Private Placement, the legal name of Melco
Upon completion of the Private Placement, the conversion of the Class B Shares to Common Shares and the conversion of US$1 million principal amount of the Melco Leisure US$1.5 million Loan into Common Shares, Melco Leisure's direct and indirect ownership interest in the Company will drop from approximately 49.3% to approximately 28.7%.
The Company has delivered a formal notice of termination to
About Wisecord Holdings Limited
WHL is an investment company incorporated in
About Melco
Melco
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
FORWARD LOOKING INFORMATION
Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, and actual results may vary from the forward-looking information. Implicit in this information are assumptions regarding future operations, plans, expectations, anticipations, estimates and intentions, such as the plans to develop the ski resorts in
Forward-looking information contained in this press release is based on current estimates, expectations and projections, which Melco
For further information: Melco China Resorts, Investor Relations, Kevin O'Connor or Ali Mahdavi, Tel: (416) 962-3300, Fax: (416) 962-3301, Email: [email protected]
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