Hong Kong-listed Summit Ascent Holdings says it has conditionally agreed to grant a revolving loan in the principal amount of up to HKD500 million (US$63.8 million) to its parent, casino investor LET Group Holdings Ltd.
LET Group is the controlling shareholder of Summit Ascent, the latter firm an investor in the Tigre de Cristal casino resort (pictured), near the Russian Pacific port of Vladivostok.
In a joint filing on Friday to the Hong Kong Stock Exchange, Summit Ascent stated that the “impact of the Russia-Ukraine conflict has severely affected the economy in Russia and the ability for tourists to freely travel into and out of Russia, which in turn severely affects the outlook of Tigre de Cristal”.
Such conditions had led to the suspension of the phase-two development of Tigre de Cristal, with funds previously-allocated for that purpose, amounting to HKD479.3 million, “not required for immediate use”, Friday’s filing mentioned.
Summit Ascent stated additionally that the proposed reallocation of the funds was “fair and reasonable”, as the loan to LET Group would generate interest income for the company. The loan provision is still to be approved by Summit Ascent’s shareholders.
According to the proposed agreement, LET Group may draw the revolving loan in “one or multiple tranches” of no fewer than HKD50 million per tranche.
The loan will be available for 18 months and must be paid back within three years from its effective date. It carries 6-percent annual interest.
In September, LET Group announced a deal for a HKD400-million loan facility from four sources described as independent third parties. Under the loan agreement, LET Group pledged the equivalent of approximately 69.67 percent of the total issued shares of Summit Ascent to the lenders as security.
Summit Ascent said a fortnight ago that its profit for financial year ending December 31, 2022, could face a “material adverse” outcome due to another entity – Manila-listed Suntrust Resort Holdings Inc – failing to pay the due interest on convertible bonds issued in 2020. Suntrust, a firm indirectly held by LET Group, is developing the “main hotel casino” at the Westside City Project, located in Manila’s Entertainment City.
