Summit Ascent Holdings Ltd has confirmed a majority-owned subsidiary is to sell, for US$116-million, G1 Entertainment LLC, the gaming licence holder of the Tigre de Cristal casino resort in the Russian Far East. It cited “uncertainties arising from the ongoing Russia-Ukraine conflict”.
The Wednesday filing said Summit Ascent’s stock – in a trading suspension on the Hong Kong Stock Exchange since January 11 – would remain suspended “pending the publication of the inside information announcement” as defined under bourse rules.
The update also said the deal would go ahead despite the “disapproval” of most of the board at Summit Ascent and its Hong Kong-listed parent Let Group Holdings Ltd.
On January 15, Summit Ascent and LET Group had respectively announced that only casino investor Andrew Lo Kai Bong remained as a director and chairman for both companies, after the other directors of the respective firms had resigned due to “disapproval” of the deal.
But Wednesday’s statement from Summit Ascent – echoed separately the same day by LET Group – said: “The disposal will… proceed in view of the uncertainties arising from the ongoing Russia-Ukraine conflict and related sanctions imposed on the Russian Federation, which are adversely affecting the operations and prospect of G1 Entertainment.”
In an August filing, Summit Ascent said it had swung to a loss of HKD16.1-million (US$2.1-million) in the first half to June 30, compared to a HKD85.2-million profit in the prior-year period.
The group noted in its Wednesday statement, that a “binding agreement” for the disposal of the Tigre de Cristal licence holder was signed between Oriental Regent Ltd – as seller – and a buyer, on January 15. The disposal constituted “a very substantial disposal” under stock market rules, Summit Ascent stated.
It added: “Further announcement will be made by the company if and when appropriate after due consideration and evaluation.”
The initial information about the sell-off exercise in the G1 Entertainment entity came on January 10 from Taiwan firm Firich Enterprises Co Ltd.
Its unit Firich Investment Ltd has a 20 percent stake in Oriental Regent, with 77.5 percent owned by Summit Ascent. Firich Investment’s share of the proceeds is said to be US$28 million.
The buyer of G1 Entertainment is Russian entity Dalnevostochniy Aktiv LLC, according to a filing by Firich Enterprises to the Taiwan Stock Exchange.
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