Macau Legend aims at share consolidation, potentially planning to raise funds through further issuance

Satellite casino operator Macau Legend is moving forward with plans for a share consolidation, despite concerns over its viability due to the upcoming closure of its casino operations in the gaming hub by the end of the year.

The Hong Kong-listed company, which operates the Legend Palace casino at Macau’s Fisherman’s Wharf will hold a vote on the share consolidation on July 30^th.

The motion comprises of consolidation of every 10 existing shares in the issued and unissued share capital of the company to be consolidated into one share.

The group notes that the authorized share capital of the company is HK$1 billion ($127.4 million), divided into 10 billion shares. Following the consolidation the company would have 1 billion shares of HK$1 each ($0.13).

After the consolidation there would be some 620.11 million consolidated shares in issue ‘which are fully paid or credited as fully paid’.

The group notes that the consolidation ‘will not alter the underlying assets, business operations, management or financial position of the company or the proportionate interests or rights of the shareholders’.

The group is expecting that the share consolidation could become effective by September 4^th, after which trading will only be in consolidated shares.

The group further made an indication of concern over its financial status.

‘Although the Company does not have any concrete plan at the Latest Practicable Date, due to the financial needs of the Group, the Company is considering fund-raising exercises by way of, including but not limited to, rights issue after the Share Consolidation and the Change in Board Lot Size becoming effective,’ it indicated in the filing.

Early this month, Macau Legend stated that it had secured agreements with its lenders to restructure its debt, after the Audit Committee expressed concerns over the company’s ability to continue as a going concern.

As of the end of 2024, Macau Legend reported HK$2.07 billion ($265.41 million) in bank borrowings and HK$339.4 million ($43.57 million) in shareholder loans either due within 12 months or repayable on demand, despite holding HK$52.3 million ($6.68 million) in cash and bank balances.