Summit approves stake increase in Russian project

Jun 16, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck  

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The board of Summit Ascent Holdings Ltd approved on Friday the acquisition of an additional interest in a casino resort in Russia.

Summit Ascent will pay US$20.2 million to Elegant City Group Ltd, an entity controlled by Russian businessman Oleg Drozdov, in order to acquire a 14-percent equity stake in the project. Elegant City will keep a 15-percent interest in the casino resort.

After the deal, Summit Ascent’s equity interest in the Russian complex will increase from 46 percent to 60 percent.

Under the same deal, Firich Enterprises Co Ltd, a Taiwan-listed maker of electronic gaming machines, will enlarge its stake from 19 percent to 20 percent, while Melco International Development Ltd will retain a 5-percent stake in the project via a subsidiary.

According to previous filings, Summit Ascent is controlled by Lawrence Ho Yau Lung (pictured), chairman of Melco International and also co-chairman of Macau casino operator Melco Crown Entertainment Ltd.

The Russian casino resort complex, located near the port city of Vladivostok, is expected to have 119 hotel rooms, 800 slot machines, 25 VIP gaming tables, 15 mass market baccarat tables and 25 mass market tables providing other table games. The casino is targeted to open in the last quarter of this year, Summit said in previous filings.

In September last year, Mr Ho pledged to invest US$700 million in the gaming resort, signing a deal with the Russian authorities.

But in November Summit Ascent confirmed to the Hong Kong bourse that Mr Drozdov had been arrested by Russian police. Summit Ascent said it was for “suspected business malpractices unconnected with the casino project”.

In a further filing in April this year, Summit Ascent said that the “unexpected detention of Mr Drozdov has created unforeseen financing constraints in respect of the project”. On the same filling, the company announced the deal to acquire part of Mr Drozdov’s participation in the casino resort as a way to “resolve those constraints”.

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