May 14, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck
Suncity Group Holdings Ltd, a Hong Kong-listed vehicle controlled by Macau casino junket investor Alvin Chau Cheok Wa, has been given the exclusive right to manage the casino and food and drink operations of Hoiana, a new Vietnam casino resort in which it has an equity interest.
The agreement will start on the day the casino opens for business and end on December 31 of the tenth year immediately following the year in which the opening date falls, said the listed company in a Monday filing to the Hong Kong bourse.
Suncity Group Holdings has previously said it hopes the casino resort can have a first-phase launch in the fourth quarter this year. The first phase of the scheme includes a casino with a total of 140 gaming tables and more than 300 slot machines, food outlets, a golf course and over 1,000 hotel rooms, according to its promoters.
“The directors believe that the … agreement will allow the group to expand its customer base to Vietnam and at the same time enable the group to leverage on the boards’ expertise in the gaming market,” said Suncity Group Holdings in its Monday filing.
In August last year, Suncity Group Holdings bought the entire equity interest in Star Admiral Ltd, which indirectly owns about 34 percent of the Hoiana casino resort.
In return for running the gaming, Suncity Group Holdings will get – via its subsidiary Suncity Group Management and Consultancy (Hoi An) Ltd (SGMC Hoi An) – a base fee and an incentive fee.
The incentive fee is an annual fee equal to 6 percent of gaming earnings before interest, taxation, depreciation and amortisation (EBITDA).
The base management fee will be a quarterly fee payable equal to the aggregate of: 3 percent of mass gross gaming revenue (GGR), net of value-added tax (VAT), for the relevant fiscal quarter.
Where Hoiana’s monthly average VIP rolling turnover for the relevant fiscal quarter is equal to or less than HKD6 billion (US$764.5 million), the SGMC unit will receive 1 percent of VIP GGR, net of VAT, for the relevant fiscal quarter. Where such VIP turnover is greater than HKD6 billion but equal to or less than HKD10 billion, the unit will receive 1.5 percent of VIP GGR, net of VAT, for the relevant fiscal quarter.
If the casino’s VIP turnover is greater than HKD10 billion but equal to or less than HKD15 billion, the SGMC unit will get 2 percent of VIP GGR, net of VAT, for the relevant fiscal quarter. Where VIP rolling is greater than HKD15 billion, SGMC will get 3 percent of VIP GGR, net of VAT, for the relevant fiscal quarter.
The fee for managing the food and drink facilities is the sum of an annual management fee equal to 3 percent of the gross food and beverage revenue for the relevant fiscal year; and an annual incentive fee equal to 6 percent of food and beverage EBITDA for the relevant fiscal year.
Suncity Group Holdings is controlled by Mr Chau, who also heads major Macau junket investor, Suncity Group, a privately-held firm.
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