Troubled casino operator Imperial Pacific International Holdings Ltd has entered into a Memorandum of Understanding with a company called Zhongfeng International Investment Holdings Group Co Limited that will see the latter subscribe for HK$50 million (US$6.5 million) of convertible bonds.
Zhongfeng is described as a “strategic partner” of the company.
According to a filing, the two parties plan to enter into a Subscription Agreement within three months, after which time the MOU will terminate if an agreement can’t be finalized.
No reason for the issuance of convertible bonds was provided, however it comes at a time when IPI finds itself facing multiple court cases over alleged unpaid fees – most notably to its former contractor Pacific Rim which is chasing US$6.8 million for breach of contract and breach of a promissory note following a recent federal court ruling in its favor.
A handful of other vendors have also entered complaints over alleged failures to pay for services, while Marianas Variety reported overnight that IPI workers staged a protest on Monday over unpaid salaries due to IPI’s bank accounts being frozen.
As reported by Inside Asian Gaming, IPI recently warned that it may have to permanently close its Saipan casino, Imperial Palace‧Saipan, pending enforcement of the Pacific Rim ruling which IPI said at the time it was unable to pay.
However, such actions may be taken out of IPI’s hands with the Commonwealth Casino Commission also threatening to suspend the company’s casino license due to its failure to pay US$37 million into a community benefit fund as per its Casino License Agreement.
IPI’s precarious financial state has become increasingly apparent in recent weeks, leading to the Commonwealth Utilities Corp cutting off power to both Imperial Palace‧Saipan and the company’s head office for failure to pay its bills.