Suncity increases stake in Summit Ascent to almost 70pct

Hong Kong-listed Suncity Group Holdings Limited has announced that it has increased its stake in Russian gaming company Summit Ascent from approximately 24.74 per cent to approximately 69.66 per cent.

Summit Ascent Holdings Ltd is an investment holding company principally engaged in the operation of the Tigre de Cristal integrated resort in Vladivostok, with Sunicty having previously indicated it planned to raise its stake to as high as 75 per cent.

In a Hong Kon Stock Exchange filing, Summit Ascent states that the net proceeds from the Rights Issue after deducting the expenses were approximately HK$1.6 billion (US$206.4 million).

The company added that it will use HK$847 million of the net proceeds to the Subscription; HK$601 million to the Phase II development of Tigre de Cristal; and approximately HK$170 million for general working capital.

‘Since the grand opening of Tigre de Cristal in November 2015, Tigre de Cristal has a track record of delivering strong local businesses in the past, thanks to the solid contributions by its local mass and slots businesses. These two segments have shown exemplary resilience in times of adversity such as temporary closure due to COVID-19,’ the group indicated.

The group also added that when travel restrictions normalise a brand-new Suncity VIP room will be unveiled, with Summit Ascent shareholders to leverage on Suncity’s experience and its gaming network and database. 

The Chairman of Sunicty and Summit Ascent, Alvin Chau Cheok Wa, was quoted in the announcement as stating that Suncity will leverage on the proximity of Vladivostok to nearby tourism markets such as South Korea and Japan to roll out facilities tailored to these tourists.

“As a businessman, I believe in operational track records. The resilience in the local Russian mass and slots businesses even in times of COVID, plus Suncity’s entertainment operating expertise can blend together to become the perfect potion for future success,’ he was quoted as saying.

The Russian company was said to not only having a gaming license granted by the Russian government lasts for an indefinite period of time, but also Tigre de Cristal benefits from lower gaming tax than other gaming jurisdictions, such as Macau.

‘This means that there is a lot of room for Tigre de Cristal to offer attractive rebates, as well as the potential to capture these rebates with the help of Suncity to set up a Direct VIP business line. In addition, Summit Ascent’s financial stability as a cash-rich, zero-debt listed company allows Summit Ascent to plan, build and operate Tigre de Cristal Phase II with utmost confidence,’ Suncity indicated.

Summit Ascent currently holds the development rights on two adjacent parcels of land, namely Lot 9 and Lot 10, in the Integrated Entertainment Zone in the Primorye region, with Sunicty informing that the company is currently refining the design and construction elements of the Phase II development on Lot 10.

Phase II development was said to double the number of existing gaming tables and slot machines and ‘significantly sizing up the lodging capacity of the existing property’ as well as adding novel entertainment concepts such as new restaurants, bars, retail shops, an indoor beach club and convention space.  

In the last years Suncity has looked to expand its business towards integrated resorts operations, with two already up-and-running in Hoiana in Vietnam, and the Tigre de Cristal, and with a third integrated resort, Westside City Integrated Resort Project, based in the Philippines, currently being developed.