Suncity listco takes lead stake in Russia casino backer

Apr 24, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck, World  

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Suncity Group Holdings Ltd, a Hong Kong-listed firm controlled by Macau casino junket investor Alvin Chau Cheok Wa, has upped its stake in the firm that promotes the Tigre de Cristal casino resort (pictured) in the Russian Far East.

As a result, Suncity Group Holdings has become the largest single shareholder of the venue promoter, Summit Ascent Holdings Ltd.

The amount paid per share – HKD1.94 (US$0.247) was almost 30 percent more than the HKD1.50 target price mentioned by the prospective vendors in a filing by Summit Ascent earlier this month.

Suncity Group Holdings said in a filing to the Hong Kong bourse regarding its acquisition: “The company aims to increase its investment in tourism-related property projects in regions other than China… the company believes that Russia is a favourable place for investment.”

Suncity Group Holdings added: “Sun Travel Ltd, a wholly-owned subsidiary of the company, has been acquiring customers (majority Chinese customers) through its operations and those customers may want to visit destinations with gaming facilities.”

The group effected the deal by acquiring sale shares from two parties that had collectively held 24.68 percent of Hong Kong-listed Summit Ascent. The latter firm was until 2017 controlled by Asian casino entrepreneur Lawrence Ho Yau Lung.

The deal, closed on Tuesday, involved a consideration totalling HKD717.8 million (US$91.5 million) being paid collectively to Jerry Kuo Jen Hao and First Steamship Co Ltd, said the suitor. According to Suncity Group Holdings, the acquisition was funded out of a previously-announced loan of up to HKD1.5 billion made by Mr Chau to the company.

First Steamship is a conglomerate listed on the Taiwan Stock Exchange.

Suncity Group Holdings said that prior to completion, it had held approximately 3.29 percent of the issued share capital of Summit Ascent. Upon completion its interest increased to approximately 27.97 percent.

The purchase was via Suncity Group Holdings’ wholly-owned subsidiary Victor Sky Holdings Ltd.

“In 2017, nearly 1.8 million Chinese citizens travelled to Russia,” added Suncity Group Holdings.

The Russian Federation has a border with China. Tigre de Cristal is near Vladivostok, a Pacific port in the Russian Far East.

Mr Kuo has been the chairman and a non-executive director of Summit Ascent since December 2017, the month that Mr Ho sold off his stake in Summit Ascent.

Neither Suncity Group Holdings nor Summit Ascent clarified in their respective Tuesday filings whether Mr Kuo would remain on the Summit Ascent board.

Summit Ascent reported last month a profit of HKD7.6 million for full calendar year 2018, compared to a profit of approximately HKD13.8 million a year earlier. In its March announcement Summit Ascent said it would be revising soon the designs and financing for the second phase of Tigre de Cristal, and aimed to have it open in the summer of 2021.

Suncity Group Holdings said in its Tuesday filing: “As the target group is going to develop phase two of the Tiger de Cristal project, it is the right time for the company to increase its stake… such that the company can have more influence on the development of phase two. The management team of the company has vast experience in development of integrated resorts with casino.”

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