Nasdaq-listed Entertainment Gaming Asia Inc is selling all 670 of its electronic gaming machine (EGMs) seats placed at NagaWorld casino to an unnamed third-party in Cambodia for US$2.5 million, the firm announced.
Hong Kong-listed casino firm NagaCorp Ltd operates NagaWorld, located in Cambodia’s capital Phnom Penh.
“Prior to the sale, [Entertainment Gaming Asia] had leased EGMs to NagaWorld and that arrangement was terminated effective June 30, 2016 in connection with the sale transaction,” the company said in a Wednesday release.
Entertainment Gaming Asia had began fixed lease operation of the EGMs at NagaWorld on March 1, following the expiration of the company’s participation contract on February 29.
In the Wednesday filing, Entertainment Gaming Asia announced it also sold all 154 of its EGM seats placed at Leisure World VIP Slot Club in Pampanga province, in the Philippines, to the venue owner for US$750,000. “Prior to the sale, the company had leased EGMs to Leisure World until June 30, 2016 when the contract expired,” stated the release.
Entertainment Gaming Asia said it would continue its EGM leasing operations in two venues in Cambodia and two venues in the Philippines.
The Cambodia venues – according to information included in Entertainment Gaming Asia’s 2015 annual report – comprise: Thansur Bokor Highland Resort, in Kampot province; and Dreamworld Club (Poipet), in Banteay Meanchey province near the Thailand border.
The Philippines venues are located in the greater Manila area, according to the same annual report.
“The contracts for these two venues in the Philippines expired on June 30, 2016. However, the EGMs remain in operation as the company is working to swiftly renew these contracts retroactive to July 1, 2016,” Entertainment Gaming Asia stated.
Entertainment Gaming Asia became in late 2014 a majority-owned subsidiary of Hong Kong-listed Melco International Development Ltd. The latter is headed by casino entrepreneur Lawrence Ho Yau Lung.
“We continue our strategic efforts to refine our business operations and position ourselves for new potential opportunities,” company chairman and chief executive Clarence Chung Yuk Man (pictured) said in a prepared statement.
He added: “While the exit from two EGM leasing contracts will have a negative impact on our near-term cash flow, we believe the cash proceeds of the sales will further enhance our ability to pursue new growth opportunities that will fuel long-term growth for the company.”
The total gain expected to accrue to Entertainment Gaming Asia as a result of the two sales is approximately US$1.9 million, the parent Melco International stated in a separate release.
Entertainment Gaming Asia’s business activities include leasing EGMs to the gaming industry in Asia. Until recently, it also manufactured and distributed gaming chips, gaming plaques and related products. In May the firm sold that business to casino currency and table games equipment firm Gaming Partners International Corp.
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