Summit Ascent Holdings Ltd, controlled by Lawrence Ho Yau Lung (pictured), announced on Tuesday that phase one of its casino project in Russia will only by completed around April 2015.
“Subject to the time taken for usual commissioning formalities such as government inspection, approval and the issuance of the occupation permit, etcetera, the casino hotel is now expected to be fully operational sometime in the second quarter of 2015,” the firm said in a filing to the Hong Kong Stock Exchange.
Mr Ho is also chairman of Melco International Development Ltd. The firm has a minority stake in Oriental Regent Ltd, which owns the Russian project. He is also co-chairman of Macau casino operator Melco Crown Entertainment Ltd.
Summit Ascent had previously said the first phase of the project, planned for the Primorsky Integrated Entertainment Zone (IEZ), near Vladivostok, was targeted to open in the last quarter of this year.
“Due to unforeseen obstacles associated with executing a project of this size in the Russian Far East, the proposed dates of completion of construction and full opening are expected to be delayed,” Summit Ascent said in Tuesday’s filing.
The company highlighted several reasons for the delay, including “delay encountered in the re-design approval by the local government authorities”, a re-design needed to bring the project up to an “international standard”.
Summit Ascent added it expects “no further delays relating to approvals of the re-design”.
Another problem impacting construction progress were issues encountered in the procurement of import materials and equipment, which needed to be certified by the relevant government authorities, Summit Ascent said.
The firm added that Oriental Regent also faced delays in obtaining quotas for foreign workers, an issue that has now been resolved, according to the filing.
Summit Ascent pointed out that the installation of the façade and several other exterior and landscaping works around the casino hotel are expected to be completed before end-year.
The firm added the bulk of the main building has now been handed over to China Construction (Russia) Co Ltd, the subcontractor responsible for interior installation of mechanical, electrical and plumbing and fit-out.
The casino complex is expected to have 119 hotel rooms, 800 slot machines, 25 VIP gaming tables, 15 mass market baccarat tables and 25 mass market tables providing other table games.
More shareholder changes
Summit Ascent’s filing also mentioned a shareholder shuffle in Oriental Regent, with Elegant City Group Ltd transferring its 15-percent stake in the firm to other parties.
This is the second change in Oriental Regent’s shareholder structure in three months. The moves were spurred by the arrest of Russian businessman Oleg Drozdov in November last year by Russian police. Mr Drozdov controls Elegant City.
In April this year, Summit Ascent said that the “unexpected detention of Mr Drozdov has created unforeseen financing constraints in respect of the project”.
Under the latest shareholder restructuration, Firich Enterprises Co Ltd, a Taiwan-listed maker of electronic gaming machines, will enlarge its stake in Oriental Regent from 20 percent to 25 percent.
The share reshuffle adds a new shareholder to Oriental Regent – Perfect Giant Investments Ltd, with a stake of 2.5 percent. The Hong Kong incorporated firm was described in Summit Ascent’s filing as being wholly owned by Petr Sindyukov, a Russian businessman with various business interests. He was also involved in the gaming business prior to the closure of all casinos in Russia in 2009, added the document.
The remaining 7.5 percent stake owned by Elegant City will be put under a discretionary trust, to be set up by Mr Drozdov for the benefit of his three children and a relative. Summit Ascent’s filing pointed out that neither he or his spouse will be included as beneficiaries of the discretionary fund.
Summit’s equity interest in Oriental Regent will remain at 60 percent. Melco International will retain a 5-percent stake in the project via a subsidiary.
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