OTPP increases investment in Macau casino developer
Ontario Teachers’ Pension Plan (OTPP) has invested HK$299.9 million ($38.7 million) in Macau casino and hotel developer Louis XIII Holdings through a zero-coupon convertible bond issue. This is the Canadian pension plan’s second commitment to the project, following a subscription to HK$1 billion in convertible bonds issued by Louis XIII subsidiary Paul Y Engineering in January.
According to a regulatory filing, the bonds will convert into 36.45 million shares at HK$8.23 apiece, giving OTPP a 7.50% interest in Louis XIII. Upon full conversion, an additional 148.2 million new shares will be issued to the investor. This is part of a wider capital-raising exercise that also saw Louis XIII raise HK$734.5 million through a share placement.
The company developing a parcel of land on Macau's Cotai Strip on which it plans to build a $1 billion luxury casino, hotel and retail complex that will "pay homage to the French king, Louis XIII, in its use of an opulent 17th century French Renaissance and Baroque design concept." The company promises unsurpassed levels of luxury, including the most expensive hotel suite in the world.
Louis XIII was created when Stephen Hung, former co-head of Asia investment banking at Merrill Lynch and now chairman at Louis XIII, teamed up with Paul Y Engineering, an engineering and property services group active in Hong Kong, Macau and mainland China.
In March, Paul Y Engineering completed an in specie distribution of 49% of an intermediate holding company responsible for its management contracting and property-related businesses. It also changed its name to Louis XIII Holdings to reflect the change in commercial focus.
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