11:05     MELCO INT'L DEV<00200> - Announcement (16)                          

    *   Great Respect is responsible for all costs and                        
    expenses incurred in relation to the application,                         
    provided that the land premium payable on the grant of                    
    any land successfully secured as a result of Great                        
    Respect's efforts would be borne by Melco Leisure and                     
    Great Respect in accordance with the percentages                          
    specified below.                                                          
                                                                              
    *   The Joint Venture MOA provides that if the Macau                      
    Government were to agree to grant land in Cotai to the                    
    Joint Venture, or the vehicle provided by Melco Leisure                   
    to make the application, Melco Leisure would have an                      
    interest of 50.8% in the land and Great Respect would                     
    have an interest of 49.2%.                                                
                                                                              
    *   Similarly, the Joint Venture MOA also provides that,                  
    upon a land application being approved, the parties                       
    would form a joint venture to develop the land on a 50.8%                 
    (Melco Leisure): 49.2% (Great Respect) basis.                             
                                                                              
    *   Great Respect is required to liaise with SJM for                      
    the operation of a casino at the developed property.                      
                                                                              
    *   The Joint Venture MOA contemplates that the parties                   
    would negotiate and enter into more detailed joint                        
    venture documentation prior to the formal grant of                        
    development rights in relation to any land secured by                     
    Great Respect for the benefit of the Joint Venture.                       
                                                                              
    INFORMATION ON THE MELCO GROUP                                            
    Currently, the Melco group's business is broadly                          
    divided into four divisions:                                              
                                                                              
    *   Leisure and entertainment                                             
                                                                              
    *   Investment banking and financial services                             
                                                                              
                                                                              
    *   Technology                                                            
                                                                              
    *   Property investment                                                   
                                                                              
    Great Wonders, an existing member of the Melco                            
    Entertainment group, is in the case of applying a grant                   
    of a parcel of land with an area of approximately 5,230                   
    sq. metres located at Biaxa da Taipa, Macau for                           
    developing a luxury hotel with a casino and electronic                    
    gaming machine lounge. It is contemplated that upon                       
    completion of the hotel, the casino will be operated                      
    by SJM and the electronic gaming machine lounge will                      
    (subject to the approval of the Macau Government                          
    authorities) be managed by Mocha Slot, a subsidiary of                    
    Melco Entertainment. Details of this investment are set                   
    out in Melco's announcements dated 23rd November 2004                     
    and its shareholder circular dated 5th January 2005.                      
                                                                              
    FINANCIAL INFORMATION                                                     
    Melco Hotels was incorporated as a special purpose                        
    vehicle, and the Joint Venture was established, in each                   
    case, with the sole business purpose of applying to the                   
    Macau Government for the development rights in respect                    
    of one or more parcels of land in Cotai, Macau and                        
    subsequently developing any land acquired. Except for                     
    having been offered the right to apply to the Macau                       
    Government for the development rights in respect of the                   
    Land and except for Melco Hotels having made an                           
    application to the Macau Government for the grant of                      
    development rights, each of the Joint Venture and Melco                   
    Hotels have not and do not carry on any business, have                    
    made no sales, have no turnover or other material assets.                 
    Moreover, since no development rights have yet been                       
    granted in respect of the Land, the 49.2% interest of                     
    Great Respect in the Joint Venture does not have a net                    
    asset value or income stream attributable to it. The                      
    unaudited management accounts of Melco Hotels as at 30th                  
    April 2005 show a net asset value of MOP 25,000                           
    (equivalent to approximately HK$24,224) as at the date                    
    of those management accounts and turnover of zero since                   
    the date of Melco Hotels' incorporation on 20th July 2004.                
    As at the date of this announcement, the net asset value                  
    of the Joint Venture is zero.                                             
                                                                              
    FINANCIAL IMPLICATIONS OF THE TRANSACTIONS                                
    Completion of the First Agreement and the Second                          
    Agreement will not give rise to a gain or loss for Melco.