A deal worth HKD2.23 billion (US$288 million) whereby China Star Entertainment Ltd would dispose of rights over several prime Macau land plots next to its Lan Kwai Fong hotel property (pictured) in Macau has been terminated.
The parties agreed that the deal “be terminated and cease to have any effect,” China Star said in a filing to the Hong Kong Stock Exchange on Wednesday.
The firm on November 21 said it had entered into a deal regarding the disposal of property leasehold rights of some undeveloped land plots next to the Lan Kwai Fong hotel.
“The reason for the termination of the disposal agreement is the anticipated inability of the entering into of the supplemental property leasehold right agreement by March 31, 2015,” the firm said after market hours.
The property leasehold rights agreement for the undeveloped land plots needed to be executed by, respectively: Sociedade de Turismo e Diversões de Macau SA (STDM) the parent firm of casino operator SJM Holdings Ltd; the target firm in the deal (an offshore investment holding company); and China Star.
There is currently a casino licensed by Macau gaming concessionaire SJM Holdings inside the Lan Kwai Fong hotel, with a total of 84 gaming tables and 108 slot machines. In November, China Star announced it was also negotiating the potential sale of the hotel, for a consideration of HKD3.75 billion.
On Wednesday, China Star said that negotiation for the disposal of the hotel building has also ceased and that “such transaction will therefore not proceed”.
For the year ended December 31, 2014, China Star posted a profit attributable to owners of the company of HKD209.7 million, up by 123 percent from the prior-year.
Revenue for the year however decreased by 9 percent year-on-year to about HKD1.3 billion, the company reported on Wednesday.
Operating profit jumped 71 percent year-on-year to approximately HKD226.7 million. Such increase was mainly attributable to a decrease in impairment loss recognised in respect of the intangible assets of the gaming promotion operations, as well as to a reduction in administrative and finance costs, the firm said.
