Macau Legend Development Ltd, a well-known entity in Macau's hospitality and satellite casino services sector, has unveiled a proposal for the consolidation of its shares. This initiative is tailored to elevate the company's stock market performance by increasing its share price and promoting seamless trading activities. Such details were elaborated in a filing made by the company, which was publicized post the trading hours of the Hong Kong Stock Exchange.
By reconfiguring its existing and unissued share capital into one share for every 10 existing shares, Macau Legend aims to create a more manageable and valuable share structure. The company did not stop at share consolidation. It is also contemplating potential fundraising activities, possibly in the form of a rights issue, to address the financial necessities of the group. While these plans are under consideration, Macau Legend is yet to cement any definitive strategies regarding this course of action, lingering instead at the exploration stage.
Impact of Regulatory Changes on Macau Legend
The operational landscape for Macau Legend is poised for significant change due to the upcoming regulatory adjustments in Macau's gaming sector. The firm currently manages the Macau Fisherman’s Wharf, a prominent gaming and leisure complex on Macau’s peninsula. Within this establishment, Macau Legend endorses the satellite gaming business at Casino Legend Palace, a business that has been conducted under the rights provided by SJM Holdings Ltd. However, a major shift looms as SJM Holdings has declared its intention not to sustain operations at Casino Legend Palace past the current year.
This decision aligns with the enforcement of new satellite regulations, which necessitate a transition to a management fee model. This three-year grace period provided for compliance ends on January 1, 2026, forcing Macau Legend to revisit its strategic decisions pertaining to the casino’s future. To formalize the share consolidation, a special general meeting is slated for July 30, where shareholders will vote on the matter. Once sanctioned, the consolidation is set to take effect on August 1. Post-consolidation, Macau Legend will operate with a reduced number of shares, specifically 620,118,712 consolidated shares.
This restructuring doesn't impact the company's authorized share capital, maintaining it at HKD1 billion, but the share division alters to 1 billion consolidated shares valued at HKD1.0 each. The company also plans to increase its board lot size from 1,000 existing shares to 4,000 consolidated shares.
Financial and Market Implications of the Proposal
The strategic move by Macau Legend stems partly from the stock's performance. Over recent months, the share price has hovered close to or even dipped below HKD0.10, a scenario considered alarming given the listing rules of the exchange which categorize such a price point as near its threshold limit. Investors looking at board lot values have noted a shortfall, as the current value stands at HKD89.00, contrasting starkly with the recommended minimum of HKD2,000 in line with the exchange’s trading guidelines. Macau Legend firmly believes that the proposed consolidation will lead to a favorable adjustment in share valuation, making investment in the company’s stock more appealing to a diverse investor base.
The organization is hopeful that this will not only enhance the liquidity of their shares but also expand their shareholder demographic significantly. Importantly, as the company reassures its stakeholders, the share consolidation will not bear an impact on the company’s underlying assets, operational practices, management, or financial stature, nor will it alter the proportional interests of existing shareholders.
Source: Satellite op Macau Legend plans share consolidation, mulls fundraising via rights issue, June 30, 2025.
Posted by Wizard
Jul 01 2025
Jul 01 2025
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