New Silkroad Culturaltainment Ltd, a Hong Kong-listed firm that says it has an interest in a casino project on Jeju Island in South Korea, is planning to raise a minimum of approximately HKD1.47 billion (US$189.5 million) gross via a share subscription.
It will issue not less than 916,454,764 offer shares at the subscription price of HKD1.60 per offer share, on the basis of two offer shares for every five shares held in the company on the record date. Transfer of shares must be registered by November 21.
A filing to the Hong Kong Stock Exchange on Tuesday said the exercise would allow the company to “reduce its finance costs, lower its debt level and strengthen its financial position,” providing funding for a 72-percent owned unit called MegaLuck Co Ltd, “to develop its casino business in Jeju, Korea”.
The filing said the gearing ratio of the group – calculated by total borrowing divided by total equity – was approximately 66.5 percent as at August 31.
“It has been the intention of the board to reduce the debt level of the group as well as to minimise its reliance on the controlling shareholder for financing,” added the document.
The filing said the controlling shareholder was Macrolink Culturaltainment Development Co Ltd, a firm listed on the Shenzhen Stock Exchange in mainland China.
In May, a unit of Melco International Development Ltd, a firm led by gaming entrepreneur Lawrence Ho Yau Lung, said it was to provide consultancy services to a casino that was “to be developed” over a period of three years on Jeju.
Under the deal, a Melco International unit called Melco Gaming Assets Management (Korea) Ltd was due advise a firm called New Silkroad Korea Development Ltd.
The May announcement said that New Silkroad Korea was a wholly-owned subsidiary of New Silkroad Culturaltainment Ltd.
