GGRAsia – APE axes lease agreements, says to write off US$3.4mln

APE axes lease agreements, says to write off US$3.4mln

May 22, 2020 Newsdesk Industry Talk, Latest News

Hong Kong-listed Asia Pioneer Entertainment (APE) Holdings Ltd says the group has terminated on Thursday (May 21) finance lease agreements with two companies, claiming that those firms failed to pay lease rental fees. The company said it expected to write off an aggregate of about HKD26 million (US$3.4 million) in finance lease receivables for the six months to June 30, 2020.

The group’s interests include Asia Pioneer Entertainment Ltd (APE Macau), a Macau-based distribution, sales and servicing business for casino slot machines and electronic table games. The unit has business across the Asia-Pacific region, and is also involved in leasing and consultancy work.

The group identified one of the two business deals as a finance lease agreement with Glimex Inc in December 2018 concerning leasing of certain electronic gaming equipment “for use at a casino in the Philippines”. The other was a finance lease agreement with Siam Star Leisure Co Ltd, also dated to December 2018 regarding leasing of electronic gaming equipment “for use at a casino in Cambodia”.

APE Holdings said that, under the agreements, if any of the lessees fails to make any payment of the lease rent or any amount payable when due, “the relevant finance lease agreement shall be terminated without the need for any notice or demand.”

“As at the date of this announcement, Siam Star and Glimex have failed to pay APE Macau lease rental of approximately HKD17 million and HKD9 million respectively under the finance lease agreements,” stated the Hong Kong-listed firm in its Thursday filing. It added that that agreements “were terminated on 21 May 2020”.

Following the termination of the agreements, APE Macau “has exercised its rights to demand the return of the electronic gaming equipment leased,” said the parent company. It added that it would look for new lessees for such equipment “in Macau or other Southeast Asia countries”.

APE Holdings had warned in April that the Covid-19 pandemic would have a “material adverse impact” on the group’s financial performance. Earlier this month, the company reported a net loss of just under HKD4.1 million, more than double from the prior-year quarter.