Diversifying into lending
The board of directors of Macau junket operator Neptune Group Ltd. has proposed a plan that would consolidate shares “in view of the recent trading price and board lot value of its existing shares,” reported GGRAsia.
Subject to the consolidation, Neptune is proposing to raise from HKD96.94 million (US$12.5 million) to HKD100.53 million before expenses, issuing not less than 230,800,000 offer shares “at the subscription price of HKD0.42 per offer share,” according to the filing. The offer will be available only to eligible shareholders, said the firm.
Neptune, which posted a net loss of HKD257.0 million (US$33.13 million) in the second half of 2015, plans to use the net proceeds from the share offer to develop and operate the group’s money-lending enterprise—a new business model that arose from the loss of VIP gaming in Macau. A recent report from the gaming promoter said the old model is “no longer sustainable,” and junkets must turn to alternate revenue sources.
“We face a daunting challenge right now, seeing slumping profits and lackluster turnover from the existing business model,” said an interim report from Neptune, which marked the first six months of the 2015-16 fiscal year. “The hope is our new business strategy to secure a stable investment return from other assets and money-lending business will provide us with some much needed leeway to weather such a tough moment.”
