IR set to open in first quarter
Imperial Pacific International Holdings Ltd., now building a high-end integrated resort on Saipan in the Western Pacific, has shelved plans for a bond offering that would have funded the project, according to sources who spoke confidentially to Bloomberg News.
The firm had planned to raise from $200 million to $400 million for the property, reported the Asia Gaming Brief. But investors wanted a higher yield than the 10 percent to 11 percent the company offered, sources told the news outlet.
The Hong Kong-listed company originally planned to be open by the Chinese New Year celebration on January 28; it has since announced it will open the integrated resort sometime before the end of March. The resort, known variously in news reports as the Grand Mariana and the Imperial Pacific Resort & Hotel, will include more than 200 gaming tables and 350 slot machines.
“The construction of the group’s Imperial Pacific Resort in Garapan, Saipan has been progressing smoothly, with over 2,000 workers working around-the-clock to ensure early completion,” the company said in a filing last week. Sources tell GGB News that there has been no activity at the site in the past week.
But the opening date has been pushed back from Chinese New Year, which starts on January 28, to the “first quarter,” which ends on March 31.
Though the casino did good business in 2016, generating unaudited VIP table games rolling chip turnover of nearly US$32.37 billion, Moody’s Investor Service has warned it may downgrade the operator’s credit rating due to concerns over lack of funding, said Kaven Tsang, Moody’s vice president and senior credit officer in a statement last month. “The delay in the bond issuance could also trigger the risks of cost overruns and a potential termination of the company’s gaming license.”
Tsang added that the delay could “potentially result in more debt funding, and the company’s debt leverage could then exceed the original budget.”
“Potential investors would start to question what other alternatives might be available for the company,” added Raymond Chia, head of credit research for Asia at Schroder Investment Management Ltd. in Singapore.
In related news, a former employee of Best Sunshine International, the IP subsidiary that runs the temporary Best Sunshine Live casino on the U.S.-controlled island, has filed a suit in U.S. federal court alleging illegal practices, including failure to safeguard against money laundering.
According to Bloomberg News, former casino manager Danny Ewing said the company did not “implement or enforce” an adequate AML policy. He claims management ignored reports of violations, including a case in which IP allowed a customer to deposit $400,000 with the casino’s cashier without the required AML identification.
He is also suing for wrongful termination, immigration violations, wrongful failure to hire; and intentional infliction of emotional distress, according to the Saipan Tribune. But Mark Brown, Imperial Pacific’s chief executive officer and a former senior executive in U.S. President-elect Donald Trump’s Atlantic City casino operations, said in an interview last month that the Saipan operation complies with all relevant money-laundering and other regulations, both local and federal.
