New Silkroad Culturaltainment Ltd, a Hong Kong-listed firm that runs a foreigner-only casino in Jeju, South Korea, says it has conditionally agreed to acquire a mainland China-based company that specialises in facilitating peer-to-peer microfinancing via online-arranged and -issued personal loans.
The suitor is seeking to acquire the entire equity interest of the target – Shenzhen Niiwoo Financial Information Services Co Ltd – for a consideration of just over HKD1.41 billion (US$180.8 million), to be covered by the allotment and issuing of 1.09 billion consideration shares by New Silkroad.
The filing indicated that another mainland business called Paisheng Technology Group Co Ltd owned 95.38 percent of the equity interest of the target.
According to the suitor, the target “incorporates the elements of crowd-funding and crowd-guarantee into loan financing for loans which are typically below CNY10,000 [US$1,510].”
Wednesday’s filing gave no information on whether the target’s business would have any interrelation with New Silkroad’s existing interests.
New Silkroad currently operates the foreigner-only MegaLuck casino – via casino firm MegaLuck Co Ltd – on Jeju.
The firm says it also has a 55-percent stake in a new casino resort project to be developed on Jeju, called “Glorious Hill”.
New Silkroad is additionally engaged in the production and distribution in China of wine and baiju, the latter a Chinese alcoholic drink.
New Silkroad stated regarding its planned acquisition: “The target company does not provide any funding to the borrowers but will charge certain fees and also a commission calculated based on the interest received by the lenders on each successful transaction.”
The Wednesday filing claimed that – as of that date – there were more than 6.46 million registered users on the branded mainland China online platform used by the target.
“As of today there are over 1.6 million borrowers that have successfully borrowed money from the platform and more than CNY2.1 billion has been transacted,” added the filing.
It said transaction volume via the platform for the first nine months of this year had increased 1,228 percent year-on-year, and that the platform used by the target had 1.5 million active users per month.
Most of the investors using the platform utilised by the target “were aged between 20 to 39 years old representing a total of 70 percent of fund providers. Most borrowers were aged between 20 to 29 years old representing 61 percent of total borrowers,” stated the suitor’s filing.
Trading in New Silkroad’s shares had been halted since October 13 pending Wednesday’s announcement.
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Chief executive of U.S. tribal casino operator Mohegan Gaming and Entertainment