New SJM Holdings IR to generate US$450 million EBITDA by 2023

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New SJM Holdings IR to generate US$450 million EBITDA by 2023

Credit rating agency Fitch Ratings is forecasting SJM Holdings to generate EBITDA of HK$2bn (US$258m) at its new integrated resort (IR) in Macau in 2022.

Fitch also forecasted that the new IR, Grand Lisboa Palace, will generate HK$3.5bn by 2023.

A series of setbacks has seen the opening of SJM’s first property in Cotai delayed by over a year. But the HK$39bn venue is set to finally open its doors in Q1 2021.

“Fitch believes Grand Lisboa Palace will allow SJM to gain a foothold in Cotai and raise its market share,” it said. “We forecast Grand Lisboa Palace will have EBITDA of HK$2.0bn with 330 tables by 2022 and HK$3.5bn with 380 tables by 2023, which will be partially offset by slightly lower EBITDA at its existing properties due to table reallocation and business diverted to Grand Lisboa Palace.”

The projected EBITDA comes amid the proposed issue of US dollar-denominated notes by SJM Holdings, which will be used primarily to refinance existing debt obligations.

The notes are yet to be priced, but the announcement follows similar decisions from three other Macau gaming operators in the last month. Wynn Macau Ltd and Studio City both revealed offers of US$750m, with Melco Resorts announcing a US$250m offer.

“If the notes are issued, the company intends to use approximately 90% of the net proceeds from the proposed offering for refinancing the syndicated credit facilities and the balance for general corporate purposes,” SJM said. “The board believes that there would be a significant benefit to the company in effecting the proposed issuance and using the net proceeds for the intended purpose as it would extend the maturity profile of the group’s indebtedness and reduce the group’s secured indebtedness.”

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