Recently, Melco Resorts & Entertainment Ltd., helmed by Macau gaming magnate Lawrence Ho, confirmed that it is seeking a buyer for its Philippine project, City of Dreams Manila, indicating a potential "partial or even full" withdrawal from the Philippine gaming market.
During a financial report meeting, Geoff Davis, the CFO of Melco, stated that the company has been in contact with several potential investors and is currently in the preliminary due diligence stage. He revealed that several investors have signed non-disclosure agreements and entered the virtual data room to review relevant documents. The next step will be to select the official bidders.
City of Dreams Manila, developed in collaboration with local Philippine company Belle Corp. in 2014, is one of the four major resort casinos in Manila's Entertainment City and was once considered a crucial point for gaming expansion in Asia. However, under Melco's current "asset optimization" strategy, the project has been listed as an asset available for sale.
Earlier this year, Lawrence Ho expressed his intention to pursue a "light-asset" strategy, focusing resources on Macau and planned projects in Thailand. This has been widely interpreted as Melco's intention to phase out of the Philippine market. Subsequently, the company also announced that it is reviewing "strategic alternatives" to decide the future direction of the Manila project's equity.
Despite speculation that Belle Corp. might be the buyer, the group publicly denied rumors of interest in repurchasing shares in March. According to market reports, Melco's valuation of this equity is as high as $1 billion, which has been a major barrier to advancing the transaction.
The sale of the Manila assets is also closely related to Melco's financial restructuring goals. Since the pandemic in 2020, the company has accumulated losses exceeding $3.4 billion. Reducing debt and returning to profitability have become its priorities, and divesting non-core assets is an important way to achieve this goal.
At the financial report meeting, Lawrence Ho emphasized that the company will focus on markets with clearer long-term returns, especially Macau, and Thailand, which is awaiting legislative and regulatory finalization. It is reported that Melco plans to participate in Thailand's first round of gaming license bidding and intends to develop a new generation of resort-style casinos in Bangkok.
While negotiations in the Philippine market are yet to be concluded, industry focus is gradually shifting: whether Melco will completely exit the Philippine gaming industry and shift its entire focus to the more promising emerging markets in Southeast Asia.
