Hong Kong-listed Suncity Group Holdings Ltd has given more background on a Vietnam casino project where it is seeking a 34-percent stake in the project company.
According to a Wednesday filing by Suncity Group Holdings, the project company is currently 68-percent owned by Gold Yield Enterprises Ltd, which in turn is 50-percent controlled – indirectly – by Alvin Chau Cheok Wa (pictured), chairman of Suncity Group Holdings and boss of privately-held Macau VIP casino junket investor Suncity Group. The remaining 32-percent of the Hoi An project company is controlled by VinaCapital Corporate Finance Ltd according to Wednesday’s announcement.
Suncity Group Holdings’ interest would be acquired via the Gold Yield portion the project, the document clarified.
Suncity Group Holdings confirmed that as things stand, the first phase of the Hoi An project in Quang Nam Province, on Vietnam’s central coast, is to have a foreigner-only casino with 140 gaming tables and 1,000 slot machines.
The document further clarified that total investment capital for phase one is US$650 million. Suncity Group Holdings’ capital commitment for phase one – via its planned 34-percent interest – will be approximately US$26.22 million, stated the filing. This was on the basis that the project company had already invested approximately US$89.0 million on phase one, and that a loan facility for up to US$484 million had been obtained for phase one. As a result, the project company will need to deploy an additional US$77.0 million in capital, so Suncity Group Holdings’ 34-percent contribution amounts to circa US$26.22 million.
“The project is still in the construction stage and is expected to commence operation in 2019,” said the document.
Regarding the business to be pursued by the casino, the filing stated: “As the casino is mainly driven by the junket model, it is expected that major portion of the casino revenues will be generated by VIP patrons introduced by junket operators.”
Industry commentators had speculated that Hoi An could be a contender for gambling by locals under a possible trial in that nation regarding such business.
Andrew Lo Kai Bong, chief investment officer of the private entity Suncity Group, told GGRAsia in a July interview that the Hoi An scheme was being positioned to appeal to local Vietnamese gamblers, should such business be allowed there in the future.
The Vietnamese government published in January a decree that paves the way for selected domestic casinos to accept bets from Vietnamese gamblers, for a trial three-year period.
Under the terms of Vietnam government Decree 03/2017/ND-CP – also sometimes referred to as “Decree 3” which came into effect on March 15 – Vietnamese citizens over 21 years old with a monthly income of at least VND10 million (US$440) would be allowed to enter local casinos and gamble, news agency AFP reported. No resorts have yet been authorised to do so, according to Vietnamese media.
Wednesday’s filing from listed Suncity Group Holdings stated: “Currently, there is no official guidance on implementation of Decree 03.” It added: “Interpretation of Decree 03 and future guidance thereof may also vary from province to province in Vietnam.”
The filing further noted: “The regulatory regime of the gaming industry in Vietnam is still evolving and its development or changes might have material negative impact on the project.”
The listed firm said that – as stipulated in the project’s investment registration certificate – the whole scheme was expected to comprise seven phases to be developed over a span of 13 years on a site of approximately 985.5 hectares (2,435 acres) with the phase-one land area covering approximately 270 hectares. Wednesday’s filing said approximately 163 hectares was currently being utilised for phase one.
As well as a foreigner-only casino in phase one, there would also be: shops and entertainment facilities; a golf course; a mass-market hotel with 313 hotel rooms; an all-suite hotel with 136 suites (with 141 bedrooms in total); a hotel villa resort with 70 units (comprising 74 bedrooms); 30 villa units (comprising 68 bedrooms) for sale and timeshare rental; and a condo-hotel with 236 rooms (comprising 408 bedrooms) for sale and timeshare rental.
The investment registration certificate for the scheme states at least 1,000 lodging rooms must be put into operation in order to operate the gaming business, said Wednesday’s filing.
It added: “In the other six phases of the project, the project company will further develop the remaining site which may include… an additional 1,000 slot machines, a new golf course, residential dwellings, commercial and retail areas, opportunistic developments such as cultural villages and entertainment facilities and other public facilities.”
The filing also reiterated detail from a July announcement, that the proposed purchaser of the 34-percent stake in the project company is Goal Summit Ltd, a wholly-owned subsidiary of Suncity Group Holdings. The seller is Suncity International Holdings Ltd, a British Virgin Islands company wholly-owned by Mr Chau, according to the filing.
The consideration for the stake would be HKD600 million (US$77 million), consisting of a promissory note to the vendor in the principal amount of HKD303 million, and the issuance to the vendor of convertible bonds in the principal amount of HKD297 million.
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