Hong Kong-listed Melco International Development Ltd has subscribed to 26,062,294 new shares of common stock in Entertainment Gaming Asia Inc (EGT).
EGT operates slot machines on a participation basis and also supplies gaming chips and plaques to casinos in Asia. It currently operates one property in northwestern Cambodia in the province of Banteay Meanchey, called Dreamworld Club Poipet (pictured).
Melco International paid more than US$14 million for its subscription to new shares in EGT, via an entity called EGT Entertainment Holding Ltd, which was already EGT’s largest stockholder.
Nasdaq-listed EGT on Monday said it has successfully completed its share sale, raising gross proceeds of about US$15 million. The company sold 27,777,673 shares of its common stock, representing 100 percent of the shares offered in the rights offering, at the US$0.54 per share offer price.
Upon completion of the rights issue, Melco International’s subsidiary owns 37,512,294 shares of common stock in EGT, representing 64.81 percent of the outstanding shares of common stock of EGT’s enlarged capital.
“Accordingly, EGT has become a subsidiary of the company from completion of the EGT rights issue,” Melco International said in a filing on Tuesday.
Melco International, chaired by Lawrence Ho Yau Lung, is one of the two controlling shareholders of casino operator Melco Crown Entertainment Ltd. The other is Australia’s Crown Resorts Ltd.
“We are pleased to announce the completion of a successful rights offering and thank all those participating stockholders, particularly Melco [International] whose support has been instrumental in this process,” said EGT’s chairman and chief executive Clarence Chung Yuk Man.
“This offer is an important step in our plan to improve our capital resources and liquidity as we seek to secure meaningful new gaming projects in our target markets,” Mr Chung added.
EGT plans to use the proceeds to fund additional casinos and gaming clubs and expand its slot participation operations in Asia, the firm said in previous filings.
Last month, EGT reported a net loss of US$261,000 for the three months ended September 30, an improvement from the US$309,000 loss posted a year earlier.
EGT’s stock rose 7.55 percent on Monday trading in New York, to close at US$0.57 per unit. The firm has until April 13, 2015 to regain compliance with the minimum US$1.0 bid price per share listing requirement.
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