Junket operator Suncity Group Holdings Limited has entered into a memorandum of understanding to acquire Star Admiral Limited, a company which owns a 34 per cent equity interest in an integrated resort (IR) in Hoi An, Vietnam, the company announced in a filing with the Hong Kong Stock Exchange last Thursday after trading hours.
The company noted that the project ‘represents a prime opportunity for the group to strengthen its presence and to further extend its business in Vietnam.’
Star Admiral, indirectly wholly owned by Suncity’s Chairman Alvin Chau Cheok Wa, owns 34 per cent of Hoi An South Development Ltd, the company in charge of developing the IR project in Hoi An.
The remaining 32 per cent and 34 per cent equity interests in the project are indirectly owned by two independent third parties.
The purchaser in the deal, Gold Summit Ltd., is a direct wholly-owned subsidiary of Suncity Group.
In connection with the agreement, the company also announced in the filing that it has entered into a memorandum of understanding for service provision of consultancy and management services related to the same IR in Hoi An.
Mr. Lo Kai Bong, an executive director of the company – who Suncity claims introduced and arranged the investment opportunity for Mr. Chau – was appointed to provide advisory and consultancy services in respect to the property.
The company indicated that ‘as consideration for his services,’ the Suncity Chairman has agreed to procure for the latter ‘a certain percentage of the realized profit’ up to a maximum amount of HK$120 million (US$15.38 million/MOP123.6 million).
The aggregate consideration for the acquisition of Star Admiral has not been disclosed, with the company stating that it ‘will be subject to further negotiations’ between the parties.
Integrated Resort in Hoi An
The IR project is located in Quang Nam Province, Vietnam, which the company claims received almost a quarter of the country’s foreign visitors in 2016.
Suncity noted that the group expects ‘there will be an increasing demand for resort facilities’ in Vietnam, given that it has been subject to ‘a robust visitor volume.’
Vietnam received nearly 10 million visitors in May 2016, representing a 26 per cent increase year-on-year, according to the Vietnam National Administration of Tourism.
The project will consist of a tourism area, integrated resort, and residential areas with a total land area of some 985.5 hectares.
The Phase 1 development plan consists of the building of the integrated resort complex with entertainment and retail facilities, including a casino with a total of 140 gaming tables and 1,000 slot machines, in addition to facilities such as a golf course clubhouse, and various types of hotels targeting mass and high-end markets.
As of the date of the announcement, Phase 1 of the project was under development with expected completion in 2019.