Melco Mulls Macau Headquarters in Bid to Keep Nasdaq Listing

Melco Resorts & Entertainment (NASDAQ:MLCO) is evaluating moving its main office to Macau from Hong Kong inward an exertion to hold back its US equity listing.

Citing two unidentified sources with knowledge of the matter, the Financial Times reports Ernest Orlando Lawrence Ho’s cassino pool is considering the run to Macau, where it runs City of Dreams, because companies based in the special administrative neighborhood (SAR) are not inward US regulators’ crosshairs for possible violations of the Holding Foreign Companies Accountable Act (HFCAA).

Rather, the Securities and Exchange Commission’s (SEC) heel of about 200 US-listed Chinese companies that could follow delisted in 2024 focuses on firms based inward Hong Kong — Melco’s current home office — and mainland China.

Under guidelines set forward past the HFCAA, audits of foreign companies trading in the US must live inspected by the US Public Company Accounting Standards Board (PCAOB). In March, it was revealed that the PCAOB believes it cannot inspect Melco’s audits because Max Ernst & Cy Young conducts those examinations inwards Hong Kong, where the casino manipulator is based.

Other Firms Considering Macau Move

A germ tells the Financial Times other companies are considering moving their central office to Macau, but it’s non clean-cut if that chemical group includes gaming entities.

Three of the Macau concessionaires — MGM China, Sands PRC and Wynn Macau — get ties to US-based parent operators. For its part, Melco, past right smart of predecessor companies, has been based inward Hong Kong for more than a century.

The stock antecedently traded inward Hong Kong, but the troupe dropped that listing inwards 2015. Other Chinese companies ensnared inwards HFCAA disputation get proclaimed plans to heel in Hong Kong or experience already through with(p) so.

The seed adds that Chinese companies are ready and waiting(p) on commendation from President Xi Jinping to reposition HQ to Macau and it’s unlikely any such moves testament come without his blessing.

Melco Has Other Options

Moving its home mean inward an travail to keep its Nasdaq itemization would likely live efficient for Melco, analysts believe the casino manipulator has other cards it can play.

For example, Ho’s company could win Studio City International Holdings (NYSE:MSC) and so merge with parent Melco International Development. That programme was pitched before this twelvemonth by Bernstein analysts Vitaly Umansky and Joe Louis Li who say those transactions would unlock shareholder value, simplify Melco’s cap structure and potential reserve it to defend its New House of York listing.

Acquiring Studio City would also elucidate that company’s ownership structure. That’s relevant because it’s currently considered a orbiter cassino operator, and below Macau’s young gaming laws, all artificial satellite casinos must live owned past traditional concessionaires within the next three years. Melco International controls 56% of Melco Resorts.