- Legal States
Silvia Pavlof June 29, 2022 3 min read
Wynn Macau Grants 19 Million New Shares to Employees
Following permission by the Hong Kong Stock Exchange that was granted on June 4, Wynn Macau Ltd, operator of the luxury casino resort Wynn Macau, has issued 75 million new shares. 19 million of them are ordinary shares that are going to go to employees of the company.
New Shares Issue to Compensate Reduction in Pay
On June 8, most of the management of the company gave their consent to receive lower pay on the condition that they will be compensated with company shares for the same amount that their salaries are reduced with. Currently, the shares of Wynn Macau are traded for HKD 5.55 ($0.71) per one share, which means the valuation of the newly issued 19 million shares allocated to Wynn Macau employees amounts to HKD 105.5 million ($13.4 million). The shares comprise 0.365% of the company’s total shares count before the new issue and 0.363% of all company shares after the issue.
Wynn Macau has made a statement regarding the main goal for the new share offering, which according to the company is to: “align the interests of the relevant employees with those of the Group and encourage and retain the relevant employees to make contributions to the long-term growth and profits of the Group.”
It has to be highlighted that no employee that is about to get Wynn Macau shares is a so-called connected person. Furthermore, after receiving the new shares none of the employees’ stake in Wynn Macau is going to exceed 1% of the total amount of shares from the new issue.
Ease in Chinese Covid Restrictions Boosts Casino Stocks
The news about the issue of the new shares from Wynn Macau comes after the stocks of casino operators in Macau surged on June 28. Upon the closure of the Hong Kong stock exchange on that day, Wynn Macau shares enjoyed a surge of 12.8%.
The casino stock boost was the result of Chinese authorities relaxing their strict COVID measures, which were the main reason why Macau did not enjoy as many tourist visits as before the pandemic. The good news came that the compulsory quarantine was reduced from 14 to seven days, while the period for monitoring oneself went down to three days from seven before. The bad news is that this is a result of the shorter incubation period for the Omicron variant of Covid-19 and not a change in policy by the Chinese government, which is set to continue the implementation of its strict zero-Covid measures.
Analysts were actually surprised by the policy change as they expected the easing of restrictions to happen towards the end of the year and only after the Chinese Party Congress. D.S. Kim, who is an analyst at JPMorgan, is of the opinion that the restrictions policy shake up will not affect the revenues from Macau casinos, as tourists were exempt from the quarantine rules anyways. Yet he highlights that things are definitely going for the better and are moving slowly towards normality.