GGRAsia – ASX firm pulls out of Cambodian casino deal

ASX firm pulls out of Cambodian casino deal

Oct 09, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

A Sydney-listed company has terminated a share purchase agreement to gain control of the Roxy Casino in Bavet, citing unreliable financial reports from the venue.

The community of Bavet (pictured) is a Cambodian town with approximately 10 casinos on the border with Vietnam. It principally serves gamblers from the latter country who cannot wager in casinos at home, as well as Chinese businesspeople and tourists. Bavet is 87 kilometres (54 miles) from Ho Chi Minh City, the largest settlement in the south of Vietnam with approximately 7.4 million people.

In March, Cell Aquaculture Ltd told the Australian Stock Exchange (ASX) it would spend US$1.2 million to refurbish the casino, which under the incumbent owner had permission for traditional table games with live dealers, gaming tables with live video link for Internet bettors and for sports betting.

Cell Aquaculture actually had a soft opening for the property on May 26, telling the ASX in August that the venue had made a “modest profit” – without giving numbers.

The latest filing said that on Tuesday, Cell Aquaculture, with a registered address in Perth, Western Australia, had terminated a deal to buy a 100 percent share in the Roxy Casino from the vendors Noble Rate Ltd, Tang Dashun and Beijing Properties (Holdings) Ltd.

Cell Aquaculture said in its latest filing: “This occurred after lengthy discussions about the difficulties Roxy has had in identifying and employing skilled management personnel, particularly in the accounting area, who are prepared to relocate to Bavet.

It added: “This inability to appoint staff has caused difficulties with Roxy providing monthly reports to the company during the due diligence process, and provide meaningful budgets and 24-month expenditure and working capital estimates.”

It concluded: “In the circumstances the company has come to the view that Roxy is not currently ready for public company life, as it is not able to meet the ongoing reporting requirements of ASX in a timely fashion.”

Roxy Casino, in Bavet, in Svay Rieng province, features a main gaming hall with 15 gaming tables and eight “online gaming tables”, plus a premium gaming area with five tables offering high-stake games. It also has slot machines and a sports betting area focused on international football games, Cell Aquaculture told the ASX in a filing in August.

The termination of the deal comes at a time when both Cambodia and Vietnam are mulling allowing casinos within their respective borders to open their doors to local players.

Cell Aquaculture said that another deal with the owners of the Roxy – to acquire 100 percent of all the rights to “Haikou Free Trade Zone” project, was still active, but that the share transaction deal with Tang Dashun would be adjusted to account for a US$3 million loan from the vendors. The loan is to be repaid from an exercise planned by Cell Aquaculture to raise AUD45 million (US$40 million) via a share sale.