GGRAsia – Silver Heritage unconcerned by Nepal currency restrictions

Silver Heritage unconcerned by Nepal currency restrictions

Dec 19, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck

Boutique casino operator Silver Heritage Group Ltd says it is not concerned about a potential negative impact on its operations following further restrictions on carrying Indian currency into Nepal.

The Australia-listed company operates casino resort Tiger Palace Resort Bhairahawa (pictured in a file photo), in Nepal’s border with the Indian state of Uttar Pradesh. India is a main target market in terms of casino players for Tiger Palace Resort.

The firm also manages a gaming operation at a hotel in the Nepal capital Kathmandu. It also has operations in Vietnam.

The Kathmandu Post newspaper reported on Tuesday that the Nepalese Cabinet had decided to publish a notification banning people from carrying into the country Indian rupee banknotes above INR100 (US$1.4) denomination.

Currently, the use of notes above INR500 is not authorised for financial transactions in Nepal. But these notes are widely accepted, particularly in border towns, hotels and casinos, according to the media outlet.

The Kathmandu Post quoted Basanta Raj Mishra, executive chairman of Nepal-based hospitality group Temple Tiger Group of Companies, as saying that the decision from the Cabinet was “a big setback particularly for cash-driven industries like tourism”.

The entrepreneur said additionally that he expected the decision to particularly hurt Nepal’s “casino industry, hotels and restaurants”.

In comments to GGRAsia, Mike Bolsover, managing director and chief executive of Silver Heritage, downplayed any negative impact from the Cabinet’s decision on the firm’s operations. He said that restrictions on use of high-denomination banknotes in Nepal have existed “for a long time”.

“The Nepalese rupee and India rupee are fixed … and as such there is a well-established framework for forex between the two nations for trade and tourism,” said Mr Bolsover, adding that there would be “no additional negative impact” for Silver Heritage.

Mr Bolsover said additionally that the company would soon be able to diversify its customer sources once the airport at Bhairahaw – currently serving only domestic flights – is upgraded to receive international flights in mid-2019, with Silver Heritage relying less on Indian patrons.

“The new international airport is really coming on well now, and we expect to have a significant increase in Chinese tourists as well as Thai and Vietnamese and other Asian nations” following its opening, said Mr Bolsover. Tiger Palace Resort is located about a 15-minute drive from the airport.

Silver Heritage’s CEO said the firm recently received confirmation from the Nepal government that construction work to upgrade the airport at Bhairahawa would be completed by July 2019, with international flights set to start in September.

“We are also engaging with the government on the new tourism act which includes amendments and improvements to the casino regulations,” Mr Bolsover told GGRAsia, without disclosing details on the mulled amendments.

Silver Heritage said earlier this month that Tiger Palace Resort had a “lower than typical hold rate” in November due to VIP play. The firm added that it was pursuing initiatives to “release capital out of its asset base”.

The casino operator completed a refinancing exercise in September, which it said would give the company the chance to ramp up operations at Tiger Palace Resort.