Macau-based electronic table games specialist LT Game Ltd has made what is termed an agency agreement with a mainland China company for the research and development of gaming equipment, said LT Game’s parent, Hong Kong-listed Paradise Entertainment Ltd.
The partner firm, Shanghai Libiao, is deemed under Hong Kong listing rules as a “connected person” in relation to Paradise Entertainment. The mainland entity will be responsible for: “procurement and arrangement of payment of the research and development of the gaming equipment; and placement of production orders; arrangement of payment [and] receipt in the People’s Republic of China; and inspection and performance of quality checks” of the gaming equipment to be produced by Shanghai Libiao “in bulk” for LT Game, according to a filing by Paradise Entertainment Ltd to the Hong Kong Stock Exchange on Monday.
The parent explained in the Monday filing that Shanghai Libiao was chosen as an agent of LT Game because of its ability to provide a “one-stop” agency service in mainland China, including “arranging settlement of the consideration under the procurement transaction” in Chinese currency, on LT Game’s behalf; “assisting LT Game in inspecting and negotiating regarding any quality issues of the gaming equipment; and exporting and delivering the gaming equipment to be produced by [Shanghai Libiao] to LT Game or its customers”.
The Monday filing also revealed that Shanghai Libiao is wholly-owned by Hu Liming, an executive director of Paradise Entertainment. The firm said Mr Hu had abstained from voting on the approval of the agency agreement.
The development and production of the new gaming equipment is expected to be completed “in 2020 or on 31 December 2020”, with a maximum cash consideration of CNY27.5 million (US$4.35 million), the firm said.
LT Game would pay, separately, a one-off agency fee of CNY100,000 in cash to Shanghai Libiao when the procurement transaction is completed, it added.
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