GGRAsia – Suncity listco now holds 70pct of Summit Ascent

Suncity listco now holds 70pct of Summit Ascent

Oct 15, 2020 Newsdesk Latest News, Philippines, Rest of Asia, Top of the deck

Hong Kong-listed Suncity Group Holdings Ltd, headed by the boss of a major Macau junket investor, is now the controlling shareholder of casino backer Summit Ascent Holdings Ltd. The move came after Suncity Group Holdings took up unsubscribed shares linked to a rights issue exercise conducted by Summit Ascent. The rights issue was only 25.13-percent subscribed by public investors.

The exercise as a whole raised, in net terms, nearly HKD1.62 billion (US$208.8 million), according to a Wednesday filing made by Summit Ascent to the Hong Kong Stock Exchange.

The initiative – involving three rights shares for every two held on the record date – leaves Suncity Group Holdings, led by Macau junket boss Alvin Chau Cheok Wa, with 69.66 percent of Hong Kong-listed Summit Ascent.

Suncity Group Holdings previously held in aggregate an approximately 24.74-percent interest in Summit Ascent, but the former’s shareholders had approved in early September the move to increase ownership in Summit Ascent. The latter firm is the lead promoter of the Tigre de Cristal casino complex (pictured) at the Primorye Integrated Entertainment Zone near Vladivostok, in the Russian Far East.

A Wednesday press release, issued jointly by Suncity Group Holdings and Summit Ascent, said that following the rights exercise, the financial results of Summit Ascent would be accounted for as a subsidiary of Suncity Group Holdings, and be consolidated in the latter’s financial statements.

Summit Ascent said in a September filing it expected more than half the proceeds from the rights issue would go towards a new Philippine casino investment that is part of the Westside City Project in Manila. The casino project in the Philippine capital is being developed by Suntrust Home Developers Inc, a company controlled by Suncity Group Holdings.

Summit Ascent said at the time, that the higher-economic-growth Philippine market offered better prospects, and described the Russian Federation as having a “poor economic climate”, and at national level, “bureaucratic uncertainty”.

But in the Wednesday joint press release, the companies stated: “Tigre de Cristal benefits from lower gaming tax than other gaming jurisdictions, such as Macau. This means that there is a lot of room for Tigre de Cristal to offer attractive rebates, as well as the potential to capture these rebates with the help of Suncity to set up a direct VIP business line.”

The statement added: “Summit Ascent’s financial stability as a cash-rich, zero-debt listed company allows Summit Ascent to plan, build and operate Tigre de Cristal phase two with utmost confidence.”

Mr Chau also praised Tigre de Cristal’s performance: “The resilience in the local Russian mass and slots businesses even in times of Covid[-19], plus Suncity’s entertainment operating expertise, can blend together to become the perfect potion for future success.”

Summit Ascent stated in its Wednesday filing that of the circa HKD1.62 billion net proceeds from its rights issue, “approximately 52.3 percent or HKD847 million” would be used to subscribed to convertible bonds in Suntrust Home Developers. Approximately 37.1 percent or HKD601 million will be allocated to “the phase two development of Tigre de Cristal”; and “approximately 10.6 percent or HKD170 million” will go for general working capital.

Suncity Group Holdings already runs the Hoiana casino resort in Vietnam, and is an investor in the project.