Pansy Ho’s alliance plan good for SJM: Ambrose So

Jan 24, 2019 Newsdesk Latest News, Macau, Top of the deck  

---

The vice-chairman and chief executive of Hong Kong-listed operator of Macau casinos SJM Holdings Ltd, says he views positively the announced alliance between entities controlled by Pansy Ho Chiu King – a daughter of one of the firm’s founders Stanley Ho Hung Sun – and the Henry Fok Foundation, a body named after one of the other founders.

Both groupings are shareholders in SJM Holdings’ parent, Sociedade de Turismo e Diversões de Macau SA (STDM).

Ambrose So Shu Fai (pictured in file photo), said the move would ensure a common position on the future of SJM Holdings and the latter’s controlling shareholder, STDM.

Mr So’s remarks were reported by the Chinese-language newspaper the Hong Kong Economic Journal, and published on Thursday. Mr So said the initiative could help explain to the public the controlling interests within STDM and “reduce the misunderstanding and speculation” of the market over its internal workings.

SJM Holdings’ shares rose by 8.2 percent on Thursday, coincidental with Wednesday’s announcement – which had been made via Shun Tak Holdings Ltd, an entity led by Ms Pansy Ho – to close at HKD7.79 (US$0.992) per share.

A number of investment brokerages monitoring the Macau gaming market has previously opted not to cover SJM Holdings’ stock, citing concerns about the level of transparency of its internal power structures and that of its STDM parent.

The agreement between Ms Pansy Ho and the Henry Fok Foundation also envisions “the implementation of best practices on corporate governance and legal and regulatory compliance across the STDM group”.

‘Standardised’ governance

This showed there was no “family-style” governance either at STDM or SJM Holdings, Mr So was cited by Hong Kong Economic Journal as saying, adding the alliance would help ensure corporate governance was “more standardised”. This would have – in turn – a “positive influence” on the prospects for an extension of SJM Holdings’ current Macau gaming concession.

SJM Holdings’ current Macau gaming concession expires in March 31, 2020, but it is been widely anticipated in the market that it will seek an initial two-year extension to 2022; the same year that four out of the six current licensees will see their present rights expire. MGM China Holdings Ltd is technically a sub-concession of SJM Holdings’ rights, and therefore also has a 2020 expiry for its existing licence.

Together Ms Pansy Ho and the Henry Fok Foundation control approximately 53.012 percent of STDM’s issued shares, according to Shun Tak’s Wednesday filing detailing the alliance. The foundation owns a 26.576 percent stake in STDM; Shun Tak controls 15.781 percent; and interests associated with Ms Pansy Ho the remainder.

Angela Leong On Kei, a co-chairperson and executive director in SJM Holdings – and the fourth consort of Stanley Ho as well as mother of his youngest children – holds a 6.860-percent stake in STDM. GGRAsia approached Ms Leong on Thursday at the city’s Legislative Assembly, where she sits as a legislator, to ask for her reaction to Ms Pansy Ho’s initiative. Ms Leong declined to comment.

STDM controls 54.11 percent of SJM Holdings, according to the latter’s 2018 interim report.

“Fundamentally, SJM remains in a difficult position with pressure on market share and lateness in coming to Cotai. While governance and management issues have always been a concern to us with respect to SJM, [the] announcement in no way changes our view of the company,” brokerage Sanford C. Bernstein Ltd in Hong Kong remarked in a Wednesday note.

“With respect to MGM [China], there is no indication at this time that any changes are afoot with respect to ownership of MGM China. As such, we would encourage investors to remain focused on the operations and fundamentals of the operating businesses,” the brokerage added.

Ms Pansy Ho is the co-chairperson of, and a significant shareholder in, Macau casino operator MGM China.

---

---