Shareholders of China Star Entertainment Ltd have approved the issue of 1.5 billion shares to be subscribed by a company managed by businessman Mung Kin Keung, who was appointed co-chairman of China Star in July, the company said in a filing on Monday.
The firm had said previously that the net proceeds of the share subscription, amounting to HKD134.30 million (US$17.3 million), would be used for investment in gaming-related businesses in Macau.
China Star, which controls Casino Lan Kwai Fong (pictured) on the Macau peninsula, will issue the new shares at HKD0.09 a share, a discount of 28 percent to the closing price in Hong Kong trading on July 8, when the deal was first announced. The shares represent about 9.41 percent of the enlarged capital.
The subscriber is a company called Long Joy Investments Ltd, a subsidiary of Well Way Group Ltd. Mr Mung is an executive director of Well Way and holds approximately 22.82 percent of the issued share capital of Well Way, according to previous statements. He is chairman of Hong Kong Airlines Ltd and has investments in the logistics and resources sectors in mainland China.
Mr Mung also agreed to subscribe to HKD405 million in convertible bonds in China Star to be issued in a maximum of five tranches and at a conversion price of HKD0.09 per unit.
China Star is in the process of investing HKD800 million to buy an equity interest in the profit stream from Macau junket operator Eight Elements Entertainment Ltd. The firm said last month that additional time is required to complete the deal.
The casino operator plans to focus its growth strategy in the hotel and gaming segments. The firm posted a net profit of HKD114.8 million for the first six months of 2014, up by 86 percent from a year earlier.
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