Shareholders of Hong Kong-listed conglomerate CY Foundation Ltd have approved the deal to buy a maximum of approximately HKD201.13 million (US$26 million) worth of goods and services from Singapore gaming equipment maker Weike (S) Pte Ltd.
The shareholders approved all the transactions and the purchase caps at a special meeting on Friday, the company said in a statement to the Hong Kong Stock Exchange.
The near three-year deal involves slot machines, multi-terminal gaming machines and related software, systems and services, and would expire on March 31, 2017.
CY Foundation said it believes it is beneficial to enter into the agreement “so as to secure the continual supplies of the slot and multi-terminal machines and slot management systems from the supplier”.
The deal was defined as a connected transaction under the Hong Kong Stock Exchange rules, as Poh Po Lian, 65 percent owner of Weike (S), is also a “substantial” shareholder of CY Foundation.
The deal will be settled in three instalments, with a first payment of HKD62.5 million in March 2015.
The end user of the goods and services involved in the deal is CY Management Ltd, formerly known as Weike (G) Management Macau Ltd, a Macau-based casino services provider.
CY Management is principally engaged in management of electronic gaming machines in Macau casinos via service agreements.
The company said it plans to expand its slot machine and multi-terminal management operations to 3,000-plus units across Asia “in the coming three years”.
Currently, CY Management serves three casinos that operate under the gaming licence of SJM Holdings Ltd. They include Casino VIP Legend, Casino Casa Real and Casino Grandview. It also provides information technology services to another two casinos in Macau, the parent company said in Friday’s filing.
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Vitaly Umansky, Louis Li and Shirley Yang
Analysts at Sanford C. Bernstein