Imp Pacific talks on annual fee, says exclusivity breached
Imperial Pacific International Holdings Ltd, the developer of a casino resort on the Pacific island of Saipan, says it is still negotiating with the local authorities the settlement of the US$15-million annual casino licence fee. The information was included in the company’s interim report, filed on Monday to the Hong Kong Stock Exchange.
Imperial Pacific is said to have failed to pay the licence fee by the August 12 deadline, and it received a notice of intent from the local governor stating that its gaming licence could be suspended or revoked.
The Hong Kong-listed firm operates the still-under-construction property Imperial Palace Saipan (pictured in a file photo) on Saipan, in the Commonwealth of the Northern Mariana Islands (CNMI), a United States jurisdiction.
In a separate development, the chief executive of Imperial Pacific’s local unit in Saipan, Donald Browne, wrote a letter to the local authorities claiming that the group’s exclusive rights to gaming activities in Saipan – as stated in the casino licence agreement – had been breached, as the local authorities had allowed electronic gaming and poker arcade operations on the island.
“Imperial Pacific International (CNMI) LLC was never provided the exclusivity agreed to in the casino licence agreement. The unusually-high annual licence fee of US$15 million was only agreed to by Imperial Pacific in return for ensuring the exclusive rights provided for in the casino licence agreement,” Mr Browne wrote in the letter, according to local media reports.
The CEO asked the local authorities to allow the company to postpone paying the latest annual casino licence fee, and urged them to reduce the US$3-million regulatory fee to US$1 million, as the group’s casino operations have been temporarily suspended since March 17 as a countermeasure locally against Covid-19.
On Monday, the parent company reported a net loss of just above HKD797.9 million (US$103.0 million) for the first half of 2020, as the group’s revenue fell by 93.3 percent year-on-year, to HKD26.7 million. The company said its operations had been negatively affected by the Covid-19 outbreak.
The half-year result was still an improvement from the HKD1.88-billion loss recorded in the first six months of 2019.
For the latest reporting period, revenue from VIP gaming operations was negative to the tune of HKD24.7 million, compared to a positive result of HKD254.7 million a year earlier. Revenue from mass-market operations and slot machines was HKD32.8 million and HKD12.8 million respectively, down 66.4 percent and 57.5 percent in year-on-year terms.
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