China Star Entertainment Ltd said in a filing to the Hong Kong Stock Exchange after business hours on Friday that there was further delay in its move to buy an equity interest in the profit stream from Macau junket operator Eight Elements Entertainment Ltd.
China Star controls Casino Lan Kwai Fong in downtown Macau. It operates under a licence from SJM Holdings Ltd. The new deadline for the deal concerning Eight Elements is October 31.
“Additional time is required for the preparation of the audited financial information of the target group and relevant financial information of the enlarged group as required under the listing rules,” said China Star in its Friday filing.
The sole shareholder of Eight Elements and its parent business, Protective Capital Group Ltd, a British Virgin Islands company, is Kelvin Kam Lap Sing, according to a February 25 filing originally outlining the deal.
China Star had at that time agreed to pay HKD800 million (US$103.2 million) to Mr Kam in three instalments for the rights to the profit from the Eight Elements junket operation.
China Star said in an August 15 filing it expected its first half 2014 profit to rise by up to 95 percent year-on-year – despite a likely 6-percent fall in gross profit for the period, due to decreased turnover.
VIP casino revenue in Macau has been impacted by double-digit percentage year-on-year declines in recent months, leading to a more challenging environment for smaller junket operators.
China Star said in the same Friday filing that a decision on another deal – to issue new shares under specific mandate and to issue unsecured zero-coupon convertible bonds worth up to HKD405 million to Mung Kin Keung, a co-chairman and executive director of the company – had also been postponed, in the latter case to September 12.
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"The [Macau] government has a lead in this subject in regards to what should be done after the [gaming] concessions expire. We will be first listening to what the government will say”
Ambrose So Shu Fai
Vice-chairman and chief executive at Macau casino operator SJM Holdings