Hong Kong-listed International Entertainment Corp plans to terminate an existing hotel management agreement and sales and marketing agreement covering its New World Manila Bay Hotel, in the Philippines.
The announcement was made in a filing on Friday to the Hong Kong bourse.
The agreements are to be terminated on December 31, the document stated.
“Pursuant to the termination agreement, no termination fee shall be payable” to the current two operators, International Entertainment stated.
The current two operators are both controlled by Chow Tai Fook (Holding) Ltd. The business – started by the family of the late Cheng Yu Tung, a long-time business partner of former Macau casino monopolist Stanley Ho Hung Sun – controlled International Entertainment until 2017. That year, the firm changed hands to Brighten Path Ltd, chaired by Stanley Choi.
The Friday filing said the hotel management agreement and sales and marketing agreement had been in place since the start of 2015.
International Entertainment has a leasing agreement with the Philippine Amusement and Gaming Corp (Pagcor) for the latter to operate a casino inside the New World Manila Bay Hotel. “The monthly rental is based on a certain percentage of net gaming revenue of the casino operated by Pagcor or a fixed amount of PHP100,000 [US$1,951], whichever is higher,” according to International Entertainment’s latest annual report.
Pagcor is the regulator of the Philippine casino industry and also the operator of some publicly owned casino facilities.
“The hotel operations team of the company had learnt and accumulated relevant knowledge and skills in hotel management and hotel marketing during the period such that the team has built up sufficient experience to undertake the scope of work under the agreements, if necessary,” International Entertainment stated, explaining why it decided to terminate the deals.
It added: “The business operations of the hotel [have] stabilised; and the termination of the agreements could reduce the operating costs of the hotel.”
International Entertainment reported a profit of HKD26.9 million (US$3.4 million) for the fiscal year ended March 31, 2019. The company reported revenue of approximately HKD363.3 million in the 12 months to March 31, up by 22.6 percent from the previous year, according to its latest annual report.
The revenue derived from the leasing deal with Pagcor in the 12 months ended March 31 was approximately HKD187.3 million, staying almost flat year-on-year compared with the previous year.
Last year, International Entertainment announced a deal to take over English professional football Wigan Athletic AFC.
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