The controlling shareholder in casino investor LET Group Ltd aims to resume attempts to sell the group’s casino operations at the Tigre de Cristal resort (pictured in a file photo) in Russia. The announcement was made in a filing to the Hong Kong Stock Exchange on Tuesday, which noted that the sale price “should be no less than US$92.8 million”.
LET Group’s filing did not identify any potential buyers. It said any such suitors “must be third party(ies) independent of LET Group”.
The proposal to resume efforts for disposal of the property is from LET Group’s controlling shareholder Major Success Group Ltd, and will be put to a vote at an extraordinary general assembly of shareholders.
Major Success controls a stake of 72.1 percent in LET Group and is owned by LET Group chairman Andrew Lo Kai Bong.
Let Group said in February that a previously-announced sale of its Tigre de Cristal casino operations to a Russian firm had been terminated at the request of the would-be buyer.
That deal, first made public in January, was to involve the disposal by an entity called Oriental Regent Ltd, of 100 percent of the shares in its wholly-owned G1 Entertainment LLC to an entity called Aktiv, for a consideration of US$116 million, to be paid in Chinese yuan.
Ownership background
Oriental Regent is the company through which Summit Ascent Holdings Ltd – a majority-controlled subsidiary of LET Group – runs gaming and hotel operations at the Tigre de Cristal casino resort near Vladivostok in Russia.
G1 Entertainment holds a gaming licence for Tigre de Cristal, granted by the Russian government.
Summit Ascent owns 77.5 percent of Oriental Regent. Trading in Summit Ascent and LET Group’s shares in Hong Kong has been halted for almost six months.
Taiwan firm Firich Enterprises Co Ltd, via its unit Firich Investment Ltd, has stated it holds a 20-percent stake in Oriental Regent.
“If the subject matter to be sold is the entire issued shares in G1 Entertainment, the sale price should be no less than US$92.8 million, which is equivalent to 80-percent of US$116 million,” stated LET Group in its Tuesday filing, in reference to the disposal price that it had previously agreed with the Aktiv entity.
The firm said it would use part of the proceeds of a potential sale of Tigre de Cristal for payment of a special dividend to Summit Ascent shareholders.
The remaining part should would be used to finance the construction of the group’s casino resort project in the Philippine capital Manila – being developed by Summit Ascent’s subsidiary Suntrust Resort Holdings Inc – as well as general working capital.
The filing stated that Mr Lo’s side noted that Tigre de Cristal accounted “for a significant portion of LET Group’s revenue and Summit Ascent group’s total assets, revenue and profit in recent years”. However, it was of the view that continuing to control the project in Russia “will bring too much uncertainties and risks to the development and prospects” of LET Group and Summit Ascent.
“Any escalation of political or operational risks” faced by Tigre de Cristal related to the Russia-Ukraine conflict “may also have a domino effect on other businesses of the company”, ti was noted.
The filing added: “LET Group and Summit Ascent and its subsidiaries have assets and/or operations in Japan and the Philippines, being the most significant assets of the company, the continuing development of which is financed by bank loans. Continuing to hold G1 Entertainment carries risks of sanctions being imposed on these assets or LET Group or Summit Ascent by these countries and territories (namely, Philippines and Japan), all of which are allied with the United States.”