11:06     MELCO INT'L DEV<00200> - Announcement (18)                          

    -   following a cancellation of the Convertible Loan                      
    Notes as aforesaid (which extinguishes all of Melco's                     
    liabilities in respect of the Convertible Loan Notes),                    
    Melco is required to pay to Melco Entertainment the                       
    amount received by Melco from Great Respect on the                        
    subscription of the Convertible Loan Notes (being the                     
    purchase price paid by Melco Entertainment to Great                       
    Respect for its 49.2% interest in the Joint Venture),                     
    effectively by way of repayment of the purchase price                     
    to Melco Entertainment on behalf of Great Respect.                        
                                                                              
    The conversion price of HK$19.93 per Shares under the                     
    Convertible Loan Notes to be subscribed by Great                          
    Respect on completion of the First Agreement has been                     
    determined as the average closing price of a Share for                    
    the five consecutive trading days up to and including                     
    the Last Trading Date. The conversion price represents                    
    a premium of approximately 2.73% over the closing price                   
    of a Share of HK$19.40 on the Last Trading Date and a                     
    premium of approximately 652% over the net asset value                    
    per Share of approximately HK$2.65, based on the                          
    audited consolidated net assets of Melco as at 31st                       
    December 2004 and the then number of Shares in issue.                     
                                                                              
    Completion of the First Agreement and the Second                          
    Agreement are not inter-conditional. The issue of the                     
    Convertible Loan Notes will take place on completion                      
    of the First Agreement. Completion of the First                           
    Agreement is not conditional on completion of the                         
    Second Agreement or vice versa; however, it is                            
    anticipated that (subject to the necessary Independent                    
    Shareholders approvals having been obtained and other                     
    relevant conditions precedent having been fulfilled)                      
    the Agreements and, therefore, the issue of the                           
    Convertible Loan Notes, will be completed at                              
    substantially the same time.                                              
                                                                              
    FINANCING FOR THE TRANSACTIONS DESCRIBED IN THIS                          
    ANNOUNCEMENT                                                              
    The consideration of HK$1,175 million for the                             
    acquisition of the 49.2% interest of Great Respect in                     
    the Joint Venture will be financed from existing                          
    internal resources of Melco Entertainment.                                
                                                                              
    Great Respect has agreed to apply the entire amount of                    
    the proceeds of the sale of its interest in the Joint                     
    Venture in subscription for the Convertible Loan Notes                    
    (in order to assist Melco in financing its share of the                   
    development costs of the Land and the proposed                            
    integrated entertainment resort). Those development                       
    costs will be required to be provided by Melco and PBL                    
    to Melco Entertainment, in proportion to their                            
    respective shareholdings in Melco Entertainment.                          
                                                                              
    The Directors anticipate that the total costs of the                      
    Land and the construction and development of the                          
    integrated entertainment resort described in this                         
    announcement will be in the region of HK$7,963 million,                   
    consisting of approximately HK$1,684 million of land                      
    costs and land premium and approximately HK$6,279                         
    million of construction costs. Of the aggregate                           
    estimated costs of the development of approximately                       
    HK$7,963 million, it is anticipated that an amount of                     
    approximately HK$5,176 million will be financed by way                    
    of project financing, to be undertaken by Melco                           
    Entertainment, and an amount of approximately HK$2,787                    
    million will be financed by way of equity. Of the amount                  
    of approximately HK$2,787 million to be provided by way                   
    of equity, Melco Entertainment will, following                            
    completion of the First Agreement and the payment of                      
    the cash consideration of HK$1,175 million payable by                     
    Melco Entertainment to Great Respect on completion of                     
    the First Agreement, have internal resources available                    
    for the project in an amount of approximately HK$102.6                    
    million. The remaining amount of the funds required for                   
    the project, estimated to be in the region of                             
    approximately HK$2,684.4 million, will be funded by                       
    additional contributions of equity in, or advances of                     
    shareholder loans to, Melco Entertainment. Details of                     
    a possible Placing are referred to below and will be                      
    announced in a subsequent announcement, to be made                        
    following the completion of the Placing exercise.