China Star Entertainment Ltd, a services provider in the Macau casino market, said in a Friday filing that its net gain on disposal of the Lan Kwai Fong (LKF) casino hotel (pictured) would be more than double a “gain on disposal” figure it had mentioned in an October 17 filing. The firm is selling the property to local businessman Chan Meng Kam.
The firm said the net gain on disposal of the venue would be HKD1.44 billion (US$184.3 million). In the earlier filing it had mentioned an “estimated gain on disposal” of approximately HKD648 million, though had added at the time that the actual figure had been due for assessment after completion of the deal, which it noted was subject to review by auditors.
China Star said in its Friday filing: “The discrepancy is mainly due to the inadvertent mistake in the inclusion of the carrying value of property, plant and equipment of the target group [the group of companies being sold] of approximately HKD653.3 million.”
The company again clarified that the new figure for net gain was “for illustrative purpose only” and was subject to the possibility of change upon audit review.
Friday’s announcement additionally said the circular to confirm the deal was likely to be “on or before November 21”, rather than on or before November 17, as had been previously stated.
The target group – a network of firms linked to China Star Entertainment – is the owner and operator of Hotel Lan Kwai Fong in Macau and is also the owner of 18 residential units in Macau, which were currently being used as staff quarters, the October 17 filing said.
The Lan Kwai Fong property features 209 rooms, a casino, restaurants, shops and a spa. As of the October 17 filing, Casino Lan Kwai Fong operated a total of 84 gaming tables, targeting both the VIP and mass market segments. It also ran a total of 65 slot machines, according to the same filing. Currently the property makes use of the gaming licence of SJM Holdings Ltd, according to information on the local gaming regulator’s website.
Purchaser Mr Chan, a veteran businessman and former Macau legislator, is chairman of privately-held Golden Dragon Co Ltd, which runs three casinos in the city, namely: Casino Golden Dragon and Casino Royal Dragon on Macau peninsula – both via the licence of SJM Holdings; and Casino Taipa Square on Taipa, making use of the casino licence of Melco Resorts and Entertainment Ltd. Casino Royal Dragon opened to the public on September 27.
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Analyst at Roth Capital Partners