GGRAsia – Universal Ent flags 2018 profit jump on Wynn deal

Universal Ent flags 2018 profit jump on Wynn deal

Mar 12, 2018 Newsdesk Japan, Latest News, Top of the deck, World

Japanese gaming conglomerate Universal Entertainment Corp says it expects a huge uplift in profit for financial year ending December 31, 2018, as a result of a settlement agreement with Wynn Resorts Ltd regarding the 2012 cancellation at discount of Wynn Resorts stock held by Universal Entertainment unit Aruze USA Inc.

Universal Entertainment said in an English-language filing carrying Friday’s date and filed with Jasdaq that the settlement announced on Thursday would gross it US$2.63 billion.

The Japanese firm said that its annual profit was now forecast to be JPY195.5 billion (US$1.83 billion), compared to its previous estimate of JPY15.9 billion, an increase of nearly 1,130 percent on the prior lookahead.

Universal Entertainment said the change was due to “the recognition of ordinary income and net income from the proceeds based on the settlement agreement… with Wynn Resorts Ltd,” announced on Thursday by the latter company.

Universal Entertainment said the net gain from the settlement – amounting to JPY179.6 billion – was after deduction of the previously-carried book value to the Japanese conglomerate regarding its Wynn Resorts’ holding – amounting to approximately JPY48.4 billion – and after deduction of “various expenses such as attorneys’ fees” amounting to JPY228.7 million.

Universal Entertainment had clarified in another filing, also carrying Friday’s date, that Kazuo Okada, the founder and former chairman of Universal Entertainment, was not a party to the settlement announced on Thursday by Wynn Resorts.

“Nothing in the settlement agreement is intended to be construed as giving a release of any kind to Kazuo Okada. Further, the company and Wynn Resorts have agreed to reasonably cooperate with each other in any future litigation against third parties,” stated the Japanese conglomerate.

Universal Entertainment has been in dispute with its founder amid – among other things – making allegations against him of “three acts of fraudulence” in relation to company funds. Mr Okada has denied wrongdoing.