- Melco is officially delisting from PSE on Tuesday, June 11
- The company failed to meet the public ownership rule
- MCO to buy out the fractioned shares
Melco Resorts and Entertainment Corp. has filed a request to delist from the PSE, effective Tuesday, June 11. The filing has been approved.
Melco Pushes Decides to Delist From PSE
Philippine-based casino brand Melco Resorts and Entertainment Corp. has revealed its decision to delist from the country’s stock exchange on Tuesday, June 11. A report fist came on Sunday and was then confirmed thanks to a filing on Monday.
The company cited weak public ownership threshold as the main reason for the decision and cited the “PSE Rule on Minimum Public Ownership for a period of more than six months.” The Philippines Stock Exchange had also warned the company that it might need to delist in light of the lack of interest.
Similarly, PSE was forced to suspend trading for Melco on December 10, 2018 again because of the company’s failure to comply with the minimum ownership rule.
Melco’s Public Trading Hasn’t Been Smooth Sailing
A distinguished operator, company has been dealing with both internal strife and lack of public interest insofar as the listing of Melco Resorts goes. In the case of Melco Resorts Philippines, the company runs the City of Dreams Manilla casino resort located in the namesake capital of the country.
As per the current company structure, the Philippines subsidiary is controlled by Melco International Development Ltd, which has a rich investment portfolio with properties on three continents, including Asia, Europe and Australia.
Melco recently initiated the stake buy-out in Australian operator Crown Resort, but possible conflict of interests with the firm’s owner, Lawrence Ho Yau Lung, has placed the deal under what could be a one-year review.
This hasn’t been the first time that Melco has tried delisting from the Stock Exchange. Melco Resorts Philippines was readying up for a voluntary delisting in November, 2018, but opposition from the company’s shareholders forced the company’s hand down.
Breaking the Rules on Public Ownership
The issue has to do with the public ownership of MCO Investment Limited Ltd. which pushed its stake from 72.54% originally all the way up to 96.1%, which meant that there was no way for public investors to hold the required 10%, and hence the PSE rule was broken.
MCO will be the ultimate beneficiary of the move with the company’s shares increasing, with the fractional shares bought up at PHP7.25 per one.