Chan now has four casinos
On January 3, hospitality service provider China Star Entertainment Ltd. in Macau completed the sale of its Lan Kwai Fong casino hotel to local businessman Chan Meng Kam. The property sold for a total consideration of HKD2 billion (US$256.2 million).
Lan Kwai Fong—with 209 rooms, a restaurant, shops and a spa—was the only casino property in China Star’s asset portfolio, reported GGRAsia. Its gaming floor, which includes 84 gaming tables and 65 slot machines, operates under the SJM Holdings license.
Chan is chairman of privately-held Golden Dragon Co Ltd., which runs three casinos in the city: Golden Dragon and Royal Dragon on the peninsula, both under the SJM license, and Casino Taipa Square, which operates under the casino license of Melco Resorts and Entertainment Ltd. Casino Royal Dragon opened to the public on September 27.
Via the transaction, Chan acquires all sale shares and shareholder loans of China Star subsidiaries Charming Era, Exceptional Gain and Most Famous, as well as a group of former China Star companies called Charm Faith, Classic Management, Best Joyful, Noble Million and Merit Noble.
In November, China Star noted the recent poor performance of its gaming segment, with shared revenue down 22 percent in 2016 and an additional 8 percent during the first half of 2017. “There is no sign that the performance in such segment will have substantial improvement in the short term,” the company stated.
According to Inside Asian Gaming, the company also worried that Lan Kwai Fong was not equipped to capitalize on the push towards mass-market tourism.
“Following new resort hotels being opened in Cotai in recent years, there is keen competition among hotels in Macau,” the company said. “The Macau government wants to attract more families and mass-market visitors interested in non-gaming entertainment as part of its program of economic diversification, which favors those resort hotels in Cotai. The board believes the performance in Hotel Lan Kwai Fong Macau will encounter uphill challenges in the near future.”
China Star said it expects an estimated gain of disposal of HK$1.44 billion (US$184 million) on the sale.
