Asian casino investor Landing International Development Ltd says it has agreed to sell the entire issued share capital of a subsidiary group for a total consideration of HKD120 million (US$15.5 million). Stepwide Developments Ltd, a unit registered in the British Virgin Islands (BVI), controls – via its own subsidiaries – land and buildings that were used for the establishment of a training centre on South Korea’s Jeju Island, according to a Monday filing.
Landing International created a resort with foreigner-only casino, called Jeju Shinhwa World, on Jeju, a popular holiday destination for Chinese and other international tourists.
The deal announced on Monday also includes the sale of a loan which bears an amount outstanding of approximately HKD395.7 million, owned by the subsidiary group to the parent company. All of the rights, interest and benefits attached to the sale loan will be transferred to the purchaser, a BVI-registered company identified as China Yueda Group Holdings Ltd.
In its latest filing, Landing International said the consideration was to be used for general working capital of the group, including its gaming business and integrated leisure resort in Jeju, as well as for “business development for potential projects if and when opportunities arise”.
The company said that a training centre had now been established in “close proximity” to its casino resort in Jeju, meaning there was not much use for the land owned by Stepwide Developments.
“The group considers that the sale proceeds from the disposal may strengthen the cash position of the group and the disposal may also enable the group to better utilise and allocate its internal resources,” said Landing International. The firm added that the disposal could also “enhance efficiency and reduce costs” related with maintenance and management of the land plots and the buildings.
Landing International said it expected to record an estimated loss on the disposal before tax and consideration of other transaction costs of about HKD7.2 million, excluding the effect of release of exchange reserve of approximately HKD19.8 million attributable to the disposal group.
In April, the casino investor completed a share placement raising HKD137.1 million net of expenses. It said the money would be used for general working capital at the firm’s Jeju Shinhwa World casino resort.
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