GGRAsia – Alvin Chau firm to raise US$116 mln via HK rights issue

Alvin Chau firm to raise US$116 mln via HK rights issue

Sep 22, 2016 Newsdesk Latest News, Macau, Rest of Asia, Top of the deck

A Hong Kong-listed company controlled by Alvin Chau Cheok Wa (pictured), head of privately-held Macau casino junket investor Suncity Group, is seeking to raise at least HKD901.4 million (US$116.2 million) via a rights issue.

Of the minimum HKD892.9-million proceeds to be generated by listed Sun Century Group Ltd net of expenses, a total of HKD803.7 million will be used for repayment of loans from third parties. A further HKD50.0 million will be for the group’s business development plan; and approximately HKD39.2 million will be for general working capital, said a Tuesday filing by Sun Century.

Sun Century’s principal activities are described as residential and commercial property development and property leasing in the mainland China provinces of Guangdong, Liaoning and Anhui; and hotel and integrated resort management and consultancy services.

According to its 2015 annual report, filed in May this year, Sun Century made a loss of RMB245 million (US$36.7 million) in the financial year ending December 31.

An announcement from the group on August 31 said it had acquired the entire issued share capital of another entity called Suncity Group Tourism Ltd, “with the intention of diversifying its business to the tourism-related service business in Macau”. The deal had first been announced in July.

Sun Century said in its Tuesday filing, outlining the rights issue: “The group intends to further expand the newly planned tourism-related business to other countries in the Asian markets, such as Vietnam and South Korea.”

Privately-held Macau junket investor Suncity Group is involved in the development of a casino resort in Vietnam’s Quang Nam province. The casino property is being promoted by Hoi An South Development Co Ltd, a joint venture between Suncity Group; Vietnam-based asset management firm VinaCapital Group; and Gold Yield Enterprises Ltd, a subsidiary of Hong Kong-based Chow Tai Fook Enterprises Ltd.

Construction of the first phase of the scheme, which will include three hotels, is due to be completed in the first quarter of 2019, Suncity Group said in May in a press release sent to GGRAsia.

The debt restructuring for listed Sun Century will involve the issuing of convertible bonds to a British Virgin Islands-registered entity called Fame Select Ltd, which is 50-percent owned by Mr Chau, and which in turn holds 57.31 percent of Sun Century.

Fame Select is also one of the underwriters of the rights issue, which will be on the basis of three rights shares for every one existing Sun Century share as held on the date of record.

Fame Select has conditionally agreed to subscribe for – and the company has conditionally agreed to issue – the convertible bonds in the principal amount of HKD570 million, added Tuesday’s filing.