Co-Chairperson and Managing Director Pansy Ho named 15 percent shareholder and Managing Director of the subsidiary which holds its Macau gaming license, MGM China Holdings, and MGM Grand Paradise disclosed to the Hong Kong Stock Exchange
The announcement from MGM China is arguably a reflection of the new Macau Gaming Concession license laws, where it is mandatory for the entity applying for a license to have the managing director of the company holding 15 percent stake, which was previously 10 percent, as well maintain a minimum capital requirement of MOP5 billion ($618 million).
Pansy Ho will be the Managing Director of the subsidiary company MGM Grand Paradise which holds the gaming license for MGM in Macau and in turn she will hold a 15 percent stake in MGM Grand Paradise.
MGM Grand Paradise will in turn issue and allot 4,070,000 Class A Subscribed Shares at an aggregate subscription price of MOP4.07 billion and 730,000 Class B Subscribed Shares at an aggregate subscription price of MOP 730 million to MGM China, which will, in turn, transfer those 730,000 Class B Subscribed Shares to Ms. Ho priced at MOP1 per share, the company filing read.
The company filing further read, “Upon completion of the Share Subscription and the Transfer, each of the Company, the Managing Director and MGM Resorts International will hold 84.6 percent, 15 percent and 0.4% of the issued share capital and voting rights of MGM Grand Paradise, respectively.”
The arrangement is being made to ensure that the subsidiary, MGM Grand Paradise, meets the condition that license-holding companies must have capital of at least MOP$5bn and the managing director of the company holding 15 percent equity.
MGM China further filing read, “Upon the successful outcome of the Tender, additional duties and obligations will be imposed on Ms. Pansy Ho pursuant to the delegation of authority to her as Managing Director from the MGM Grand Paradise’s board of directors. It is conditionally agreed that Ms. Pansy Ho will serve as the Managing Director of MGM Grand Paradise for the same term as the Concession Term in consideration of the remuneration and incentive payments set out in the Services Agreement entered into between Ms. Pansy Ho and MGM Grand Paradise.”
Pansy Ho’s remuneration as the Managing Director shall be US$8 million per annum, as well as her incentive payments based on MGM Grand Paradise’s average EBITDA, the filing read.
The Managing Director will be entitled to incentive payment spread over a 10 years timespan beginning from year 2023 till 2032 in slabs of 30 percent of the incentive amount in the first three years, 40 percent of the incentive amount in the next four years, and 100 percent of incentive amount in balance three years.
Incentive payout will be subject to achievement of EBITDA targets, $70 million as an incentive will be paid for attaining EBITDA in the range of $500 million – $999 million, whereas $95 million as an incentive for attaining EBITDA in the range of $1 billion and more, there is no incentive till the EBITDA attained is up to $499 million or less, the filing read.
