In order to finance its new integrated resort, the Lisboa Palace at the Cotai Strip on the island of Macau, SJM Holdings Ltd (0880.HK), the holding company of Sociedade de Jogos de Macau S.A. (“SJM”), is negotiating a US$3.2 billion loan with various lenders.

Global Capital reports that a “banker familiar with the situation” said that banks have been approached by the Macau branch of the Industrial and Commercial Bank of China (ICBC) on behalf of the company founded by gambling industry mogul Stanley Ho.

In spite of Macau’s declining gross gaming revenue and the significant amount of the loan, it is expected to be successfully agreed upon. The original estimate for construction of Lisboa Palace was US$3.9 billion, but due to increased labor and construction costs it later increased. A Hong Kong-based loans banker was quoted by Global Capital as saying, “The gaming industry is not doing so well but we are talking about the top three or five players here,” and, “These players will have the means to develop alternative sources of revenue, like visitor tours, and increase their income”. While the details of the loan have yet to be finalized, a four-year or six-year term loan is possible.

SJM broke ground in February 2014 and is slated to open in 2017. Lisboa Palace will feature three hotels, including a French-themed Palazzo Versace Macau and a Karl Lagerfeld Hotel. The casino will have the capacity to accommodate more than 1,200 slot machines and 700 gaming tables.

 

 

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