Studio City at Melco Crown

The budget for Studio City Casino Resort in Kotai rose 15% to $2.3 billion from $300 million, majority shareholder Melco Crown Entertainment Ltd. said in a statement.

These figures include construction and expenditure costs, design, and consultant costs.

The announcement was made in a filing with the U.S. Securities and Exchange Commission on Tuesday. Melco Crown did not provide a reason for the budget increase.

Studio City is the latest casino resort under development in Kotai with an upgraded construction budget. Hong Kong-listed MGM China Holdings Ltd increased its budget for the Kotai project to $2.9 billion in February this year, from $2.6 billion, citing rising labor costs. SJM Holdings Ltd also raised its budget for building Kotai's Lisboa Palace from HK$25 billion to HK$30 billion, citing rising construction and labor costs.

Last year, Galaxy Entertainment Group increased its budget for the second phase of the Kotai Casino Resort business to HK$19.6 billion ($2.5 billion) from HK$16 billion.

Shareholders of Studio City International Holdings, Studio City's developer, have agreed to use an additional stake proportionally to partially fund these budget increases, according to a statement. The remaining amount will be "paid out of equity commitments previously funded by these shareholders," it added.

Melco Crown has a 60% stake in Studio City International Holdings. New Cotai LLC is controlled by funds managed by U.S. investment companies Silver Point Capital LP and Oaktree Capital Management LP and owns the remaining 40% of the shares.

City of Dreams, co-chairman and CEO of Melco Crown, said in a statement that the property was "definitely on track" to open in mid-2015.

"Studio City's main location is directly adjacent to the Lotus Bridge arrivals hall, and given Hung Chin Island's growth and extensive development plans, proposing a light rail stop is one of the property's main competitive advantages," Ho added.
 

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