Suncity Group has confirmed that its wholly owned subsidiary, Suncity Group Management and Consultancy Limited (Hoi An), will provide all management services to the casino and food and beverage facilities of its Vietnam integrated resort Hoiana, due to open in late 2019.
In an overnight announcement, Suncity said that SGMC (Hoi An) had reached an agreement with the entity that owns Hoiana, Hoi An South Development Ltd, for exclusive management rights for a period of 10 years. Those rights include establishing the rates for the gaming and other facilities; managing revenue from the operation of the casino and issuing invoices and collecting fees from customers or operators; purchasing or renting facilities required for the operation of the casino; performing all ordinary maintenance and repairs at the expense of the owner; preparation of the budget; and hiring the operating personnel of the casino.
In return, SGMC (Hoi An) will be paid a base management fee and an incentive fee, with the quarterly management fee representing 3% of mass GGR (net of VAT) plus up to 3% of VIP GGR depending on turnover. The incentive fee will be equal to 6% of gaming EBITDA.
It will also earn 3% of Hoiana’s gross F&B revenue and 6% of F&B EBITDA for managing the F&B facilities.
The 10-year agreement will automatically renew for another 10 years upon expiry unless either party chooses not to extend the term.
Hoiana is 34% owned by Suncity Group subsidiary Star Admiral via a complicated ownership structure in which Star Admiral holds a 50% stake in Gold Yield Enterprises Limited, which in turn owns 68% of Hoiana.
Suncity Group Chairman Alvin Chau recently agreed to lend the company HK$1.5 billion (US$192 million) of his own money to aid in its expansion initiatives throughout Asia after it announced a loss of RMB1.46 billion (US$217.5 million) in 2018. However, Suncity Group’s lucrative junket operations don’t fall under its listed arm.