Melco Crown Entertainment: Rolling the Dice and Other Ways to Raise Capital
(9 pages of text)
The case deals with how the investment banker advising the chief financial officer of Melco Crown Entertainment Limited (MCEL), a casino and entertainment company based in Macau, will suggest the company finance two new gaming resorts currently under construction. The development of these properties has stopped because of insufficient funding, and project timelines have started to be questioned. A decision regarding the best means to raise the necessary capital needs to be made quickly or MCEL may not be able to capitalize on the lucrative, growing gaming market in Macau. The advice must consider both the immediate need to raise capital to get the projects back on track as well as the need for long-term financial flexibility to take advantage of future opportunities. The case considers a variety of domestic and international options to determine what best meets MCEL's needs.
The case is targeted at a course in international finance or financial markets at either the undergraduate or graduate level. The case allows for a discussion of the most common debt and equity alternatives, but the focus quickly turns to U.S. depository receipts (ADRs) due to the interest in raising equity rather than debt and the higher valuations available in the United States relative to the domestic Hong Kong market.
Macau; Hong Kong; United States, Large, 2006
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