Less than four months after saying that it would be focusing its operations on gaming in Macau, casino services firm China Star Entertainment Ltd is now walking on a different direction.
The Hong Kong-listed company said in a filing that it will use the net proceeds from a share subscription approved in September for “film production and general working capital”.
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.
On Friday, China Star said “no suitable investment has been identified” in the Macau gaming market.
“In order to increase the group’s flexibility in its financial and treasury management and to cope with the continuing development of the other businesses of the group, the board has resolved to allocate the net proceeds for other immediate business operation requirements, in particular, the production of new films and general working capital of the group,” the firm said.
In October, China Star bought China Star Movie Ltd, a firm principally engaged in film production.
But earlier this year, the company had disposed of several non-gaming subsidiaries in order to focus its resources on gaming services operations in Macau.
On Friday, China Star also said it has entered into a formal agreement for the disposal of the Lan Kwai Fong hotel property (pictured) on the Macau peninsula for an initial consideration of HKD2.23 billion.
There is currently a casino licensed by Macau gaming concessionaire SJM Holdings Ltd inside the hotel building, operated by China Star. Friday’s filing didn’t mention what would happen to that operation.
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"If the [Macau casino] concessions are put up for bid, there will also be a lot of giant Chinese companies, some having nothing to do with gaming, which would like to take over these enormously successful casinos”
Professor emeritus at Whittier Law School in California, in the United States, and a visiting professor at University of Macau