Melco PHL seeks SEC nod for equity restructuring

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City of Dreams Manila

MELCO Resorts and Entertainment (Philippines) Corp. (MRP) has applied for equity restructuring at the Securities and Exchange Commission (SEC), in an effort to wipe out its deficit.

In a disclosure to the stock exchange on Friday, MRP said the company and its subsidiaries MPHIL Holdings No. 1 Corp., MPHIL Holdings No. 2 Corp., and Melco Resorts Leisure Corp. have each filed the application with the SEC.

The equity restructuring will remove each of their accumulated deficit by applying its existing additional paid-in capital (APIC).

MRP earlier disclosed that it has an accumulated deficit worth P134.57 million at the company level. Including its subsidiaries, the firm’s accumulated deficit stands at P16.46 billion, according to its 2018 Annual Report.

The company will use its APIC of P22.26 billion to wipe out the deficit.

“If the restructuring is approved by the SEC, the resulting value of each company’s accumulated deficit will be reduced to P0.00. There will be no charges in the amount of each company’s total stockholders’ equity as a result of the restructuring,” MRP said.

MRP is set to be delisted from the Philippine Stock Exchange on June 11, following its failure to comply with the minimum public ownership rule.

Trading of the company’s shares have been suspended since December 10, 2018 after its public float fell to 2.06%, much lower than the 10% limit set by the exchange. This came after the tender offer of its largest shareholder, MCO (Philippines) Investments Limited, which wanted to consolidate its shareholdings in the firm.

MRP initially applied for voluntary delisting last year, citing its inability to raise funds through the bourse despite efforts to maintain its listed status.

MRP operates the City of Dreams Manila, one of three integrated resort and casinos currently operating in the state-run Entertainment City.

The company’s net income attributable to the parent dropped 46% to P286.77 million in the first quarter of 2019, even as gross revenues improved by two percent to P7.51 billion. — Arra B. Francia