GGRAsia – Suncity listco to pay US$160mln to up stake in Summit

Suncity listco to pay US$160mln to up stake in Summit

Jun 02, 2020 Newsdesk Latest News, Macau, Philippines, Rest of Asia, Top of the deck

Hong Kong-listed Suncity Group Holdings Ltd has agreed to pay – via one of its units – about HKD1.24 billion (US$160.0 million) for some underwritten shares of Summit Ascent Holdings Ltd, the promoter of the Tigre de Cristal casino complex in the Russian Far East. Summit Ascent said part of the proceeds would be used to subscribe to convertible bonds in a Philippine entity, Suntrust Home Developers Inc.

Suncity Group Holdings is controlled by Macau junket boss Alvin Chau Cheok Wa. The company is the majority shareholder in Suntrust, and already has a leading stake in Summit Ascent. Mr Chau is the boss of privately-held Macau junket investor Suncity Group.

In a Monday filing, Suncity Group Holdings said a subsidiary, Victor Sky Holdings Ltd, was to underwrite not less than 2,036,204,058 rights shares and not more than 2,066,975,058 right shares in Summit Ascent. The subscription price for the underwritten shares is HKD0.60 apiece.

The funding required for payment of the aggregate subscription price for the underwritten shares will be financed by a facility provided by Star Hope Ltd, a company also controlled by Mr Chau.

Suncity Group Holdings currently holds in aggregate an approximately 24.74-percent interest in Summit Ascent. If Victor Sky takes up all the underwritten shares, Suncity Group Holdings will control a 69.78-percent interest in Summit Ascent, and the latter company will become an indirect subsidiary of Suncity Group Holdings.

In a separate filing, Summit Ascent also proposed to increase the company’s authorised share capital to HKD150 million divided into 6.0 billion shares, from HKD80 million divided into 3.20 billion shares. It said the increase in its share capital would facilitate the rights issue and provide the company “with greater flexibility for potential future fund-raising activities”.

The company estimated net proceeds of its rights issue to be in the range of HKD1.62 billion to HKD1.64 billion. Summit Ascent said it would use about 52.3 percent of the net proceeds, or HKD847 million, to subscribe to 6-percent-annual-interest convertible bonds of Suntrust. The latter is a Philippines-listed firm involved in the development of the Westside City Resorts casino project in the Philippine capital Manila.

“Currently, the company has no intention to exercise the conversion rights attached to the convertible bonds,” said Summit Ascent.

In its own filing, Suntrust said the subscription to its convertible bonds would “support the development of the main hotel casino” planned for the Westside City Resorts complex.

The main hotel casino is to feature a five-star hotel with at least 400 rooms, and a gaming venue with approximately 400 gaming tables and 1,200 slot machines for both mass and VIP markets. The scheme is expected to commence operations prior to 2023, according to Summit Ascent’s filing.

Summit Ascent said it would also use approximately HKD601 million of the net proceeds from the rights issue to fund Phase II of its Tigre de Cristal property, which is scheduled to open gradually from 2022. The rest of the proceeds will be used for general working capital of the company, stated Summit Ascent.

These announcements came after Suncity Group Holdings said it was to increase to 74.42 percent from 51.0 percent its equity interest in Suntrust, via a subscription of PHP7.3-billion (US$144.1-million) worth of convertible bonds in the latter company.