Hong Kong-listed Landing International Development Ltd, promoter of a foreigner-only casino and resort (pictured) on Jeju Island in South Korea, is to raise HKD138.8 million (US$17.9 million), or HKD138.5 million after expenses, via subscription shares, for a combination of capital expenditure on existing facilities at Jeju Shinhwa World, and toward the cost of a new hotel there.
The firm says the move is in anticipation of recovery in tourism later this year, with the easing of the worst effects of the Covid-19 pandemic.
Following the deal, Landing International Ltd, a private firm that is parent to Landing International Development, and is controlled by businessman Yang Zhihui, will have its interest in the latter firm diluted by 7.01 percentage points, to 35.06 percent. Mr Yang is also chairman of the Hong Kong-listed public business.
Approximately HKD47.5 million of the share subscription proceeds will go on capital expenditure on the maintenance, renovation and upgrade of the existing facilities within Jeju Shinhwa World.
Such expense is likely to be incurred “from the second half of 2021 in preparation for the post-pandemic rebound in the tourism industry,” said Landing International, in a Friday filing to the Hong Kong Stock Exchange.
South Korea – in common with many places in Asia Pacific – currently has restrictions on inbound travel by foreigners, as a Covid-19 countermeasure.
In 2020, the nation saw a 71.3 percent decline year-on-year in the aggregate of visits to its casinos; all but one of the venues open to play only by foreigners.
The rest of the share subscription cash announced on Friday – HKD91 million – will go on “preliminary development cost for the construction of new hotel within Jeju Shinhwa World,” likely to be incurred from the second half of 2021.
The remaining balance, if any, will go toward payment of interest expenses and general working capital, stated the company.
The subscriber is Wealth Millennium Ltd, a British Virgin Islands company, with the guarantor being Pauline Lam, described as “a Chinese national”.
Landing International Development has made an application to list the shares on the Hong Kong bourse, and deal in them there.
Landing International Development said in April its net loss for full-year 2020 was approximately HKD2.12 billion, slightly narrowed from the net loss at HKD2.13 billion in 2019.
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