GGRAsia – Entertainment Gaming Asia announces rights offering

Entertainment Gaming Asia announces rights offering

Aug 14, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

Nasdaq-listed Entertainment Gaming Asia Inc is proposing an offering of subscription rights to purchase shares of its common stock at US$0.54 per share. The shares closed at US$0.64 on Wednesday.

The company said it intends to apply the proceeds to the “development of future casino and gaming club projects, expanding its slot participation operations and general working capital for its gaming products division”.

Entertainment Gaming Asia, linked to Hong Kong-listed casino investor Melco International Development Ltd, is a gaming company focused on the emerging gaming markets of Asia. It operates slot machines on a participation basis and also supplies gaming chips and plaques to casinos.

The rights offering will be made to the holders of company’s common stock as of a date to be determined, Entertainment Gaming Asia said on Wednesday.

The company last week reported second quarter revenue of US$4.9 million, down by 5 percent from US$5.2 million a year earlier. The fall was “due to a decline in gaming operations revenue partially offset by an increase in gaming products sales,” it said.

It said revenue from the Philippines operations was stable, with a slight improvement in average daily net win mainly due to new marketing initiatives.

In a statement, chief executive Clarence Chung Yuk Man said Entertainment Gaming Asia is seeking both slot participation and casino development projects in more established markets “in Indochina and other growing gaming markets in Asia”.

On December 18 last year, a U.S. Court of Appeals for the Second Circuit summarily dismissed a civil case brought in 2010 by investors in Entertainment Gaming Asia – formerly known as Elixir Gaming Technologies Inc – alleging that between June 2007 and August 2008, the firm made “false and misleading statements” about a slot business operated by it.

Mr Chung is also chairman of Melco Crown (Philippines) Resorts Corp, a partner in the joint venture building the casino resort City of Dreams Manila in the Philippines.