Boosting stake in Cyprus scheme
Macau casino magnate Lawrence Ho, once the largest shareholder in Summit Ascent Holdings Ltd., is getting out of Russia and into Cyprus.
According to Summit Ascent’s 2017 interim report, Ho will sell 20 million shares in Summit Ascent, lead developer of the only integrated resort in Russia’s Primorye casino zone. Tigre de Cristal opened in October 2015.
At the close of the second quarter, Ho’s stake in Summit Ascent came to 27.71 percent.
“The board has been informed by Mr. Ho—the chairman, non-executive director and a substantial shareholder of the company—that on December 15, 2017, Mr. Ho and a company wholly owned by him, Quick Glitter, entered into a placing agreement with the placing agent, pursuant to which Mr. Ho and Quick Glitter agreed to sell the placing shares at a price of HKD1.05 (US$0.13) per placing share,” said Summit Ascent. “Immediately following completion of the placing, Mr. Ho and Quick Glitter will cease to hold any shares in the company.”
Ho first slashed his ownership of the company in September; his subsequent withdrawal may have been based on “the potential for the gaming tax (a per-device fixed fee) to double next year, and potentially increase by a factor of 10 times over the next several years,” wrote Union Gaming analyst Grant Govertsen.
Govertsen also cited “numerous illegal gaming venues in closer proximity to the population base, (which) remain an impediment to the high-margin mass market story; and the likelihood of Summit Ascent’s Phase II project (and the other peer-ground Phase 1 developments) becoming diminished by the day.”
Others joining the market are Hong Kong-listed casino NagaCorp Ltd., which hopes to open its property in the first half of 2019; and Diamond Fortune Holdings Ltd., whose Selena World Resort and Casino will open Phase I in 2019.
Summit Ascent posted a loss of HKD5.4 million (US$690,000) for the first half of 2017, compared to a profit of approximately HKD5.5 million during the same period in 2016. It had planned to debut the first stage of Phase II of the property “in the second half of 2019”.
The Russian government says taxes are likely to increase 10 times by 2020, reports Asia Gaming Brief—ample motivation for Ho to get out of town. As Union Gaming noted, “We largely expect a status quo situation where the company’s Phase I project, Tigre de Cristal, remains the only legal gaming facility in the Russian Far East for the foreseeable future.”
At the same time, Melco plans to boost its stake in a planned Cyprus casino resort from 70.74 percent to 75 percent, reports Asia Gaming Brief.
“The company considers that this unique opportunity to develop and operate integrated casino resorts in Cyprus is an attractive business opportunity for the Melco Group, consistent with the Melco Group’s broader objective of establishing itself as a global entertainment and gaming operator,” the company said in a release to the Hong Kong Stock Exchange. “Partnering with CPZ, a strong local partner and member of the CNS Group, is expected to be highly beneficial to the development of the project.”
The CNS umbrella includes ventures in real estate, telecommunications, agriculture and export and mining in Cyprus, AGB reported. The Cypriot company will contribute the land for the project in return for shares in the holding company.
