Hong Kong-listed casino investor Landing International Development Ltd says it will require more funding to complete its casino resort on the holiday island of Jeju, in South Korea.
“It is currently estimated that a further investment amount of approximately US$1 billion will be required to cover the higher construction and development costs [for Jeju Shinhwa World], and the accelerated spending for the upcoming period,” the firm said in a filing on Thursday.
The Jeju Shinhwa World complex, on the South Korean holiday island of Jeju, had its initial-phase “grand opening” in April, with the launch of a 344-unit serviced resort condominium called Somerset Jeju Shinhwa World.
Landing International had announced last month an agreement with Hollywood media group Lionsgate to develop a theme park at Jeju Shinhwa World. Theme park construction is likely to start in 2018 and that facility is scheduled to open in 2019.
The firm also announced in August plans to launch a Four Seasons-branded property at the Jeju complex, scheduled to open in 2019.
On Thursday, the company additionally stated that it decided to “accelerate the construction and bring forward” the completion of the waterpark, theme park hotel, dormitory and training facilities to 2018. The facilities were originally planned to be completed in 2019.
The Hong Kong-listed company announced on Wednesday that it was considering moving its Landing Casino – a facility currently at Hyatt Regency Jeju Hotel – to the under-construction Jeju Shinhwa World.
“All these new developments and revised construction plans … have prompted additional financing needs over and beyond what was estimated at the time of, and raised in, the rights issue [completed in April],” said Landing International in the filing to the Hong Kong Stock Exchange. The firm raised net proceeds of approximately HKD5.07 billion (US$648 million) in that rights issue exercise.
The company also announced on Thursday that it is seeking to raise approximately HKD1.79 billion through the placing of new shares. “The company intends to apply the net proceeds from the placing for the development of Jeju Shinhwa World and other working capital of the group,” the firm said.
The company said it would seek six independent third parties to subscribe for up to 24 billion placing shares at a price of HKD0.075 apiece. Kingston Securities Ltd will act as the placing agent, according to the filing.
The placing shares represent approximately 16.28 percent of the expected enlarged share capital of Landing International. Assuming all the new shares are successfully placed, the chairman of Landing International, Yang Zhihui, will see his stake in the company reduced to nearly 50.3 percent from the current 60.0 percent. Mr Yang holds the stake via a holding company called Landing International Ltd.
