News of Melco Resorts and Entertainment (Philippines) Corp. being delisted from the Philippine Stock Exchange (PSE) has been circulating for about a month. The day has arrived and, as of tomorrow, Melco will no longer be found among the exchange’s offerings. The exchange chose to delist the company after it repeatedly failed to meet certain listing requirements.Melco acknowledged the delisting in a filing today, stating, “The corporation hereby informs the public that per Philippine Stock Exchange (PSE) Memorandum CN No. 2019-0023 dated May 14, 2019, the corporation will be automatically delisted from the official registry of the PSE effective on June 11, 2019, by reason of its public ownership remaining below the minimum threshold prescribed under the PSE Rule on Minimum Public Ownership for a period of more than six months.”
Melco was warned last month that it would be removed from the PSE after receiving several notifications that it was in violation of listing guidelines. Specifically, the company was meant to keep at least 10% of its stock floated; otherwise, if it failed to correct the issue by June 11, it would have to be delisted. Melco had already seen trading on the exchange suspended – on December 10 of last year – because it didn’t meet the listing requirement.
The delisting fits in with the goals of the company’s parent, Hong Kong-listed Melco International Development Ltd. It had wanted to delist the exchange through a tender offer last November, but shareholder resistance caused it to reconsider the move. It appears that Melco International was able to find a way to fulfill its goal.
The idea was to take the company private. However, what resulted was only about 2.1% of Melco Resorts (Philippines) stock being maintained on the PSE, much below the 10% requirement. As such, it was violating the rules and, absent any corrective measures, had to be taken off the exchange.
Melco Resorts (Philippines) operates the City of Dreams Manila. The company had, at one point, considered the idea of expansion in the country, but a moratorium on new casinos implemented by President Rodrigo Duterte forced the idea to be put on hold.