Hong Kong-listed Century Entertainment International Holdings Ltd says a British Virgin Islands subsidiary has a conditional agreement for “business rights” to eight gaming tables in a casino at Dara Sakor, Koh Kong Province, in Cambodia.
Century Entertainment changed its name in 2019 from Amax International Holdings Ltd. Company chairman and chief executive Ng Man Sun is a veteran of junket business in Macau.
According to Monday’s filing, the deal involves a consideration of HKD58 million (US$7.4 million), and will run for five years.
The casino belongs to an entity called LongBay Entertainment Co. Ltd. The latter had entered into a casino lease and operation agreement with a company called Lion King Entertainment Co Ltd, wholly-owned by Mr Ng. The deal allowed Lion King to lease the casino for a term running from May 1, 2021 to April 30, 2036.
Prior to that, in October 2019, Lion King and Mr Ng entered into an agreement with Century Entertainment assigning the latter firm “the rights to operate and manage” a group of four gaming tables for a period of five years commencing from March 31, 2020. Those tables were to be located in the casino at Sihanoukville’s Sunshine Bay Hotel, run at the time by Lion King and Mr Ng.
The implementation of the original deal was impacted by the temporary closure of all casinos in Cambodia from April 1, 2020, as part of a string of measures to stop the spread in the country of Covid-19. In addition, Lion King and Mr Ng eventually decided in 2020 to relocate their gaming operations to Dara Sakor.
However, under the original deal, Lion King and Mr Ng were still obliged to pay to Century Entertainment a total of HKD58 million “as a result of the enforcement of the profit guarantees” under the 2020 deal.
Century Entertainment said in its Monday filing it had decided to enforce the profit guarantees under the original deal due to it being unable to operate the agreed gaming tables for the two years ended March 31, 2022.
Under the deal now announced, the HKD58-million consideration is to be settled by offsetting the amount due from Lion King and Mr Ng. The tables are to be assigned to a British Virgin Islands firm called Victor Mind Global Ltd, a wholly-owned unit of Century Entertainment.
The eight gaming tables to be assigned under a “new framework agreement” have been operational since November 2021, according to Monday’s filing. They are located in the mass floor of the casino and are dedicated to baccarat.
It stated their unaudited gross revenue and net revenue was approximately HKD10.4 million and HKD9.2 million, respectively, during the period November 2021 to March 2022, while their unaudited net profit amounted to approximately HKD6.0 million during that time. The filing defined table net revenue as “gross revenue less gaming revenue tax and food and beverage charges”.
Century Entertainment itself recorded no revenue and a loss of approximately HKD5.8 million for the six months to September 30, according to its interim report filed on December 21.
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