Suncity Group Holdings Limited has increased its stake in Summit Ascent Holdings – the majority owner of Russian casino Tigre de Cristal near Vladivostok – to 69.66% as part of a rights issue.
The acquisition comes after Suncity shareholders last month voted in favor of the move, which boosts the company’s interest from 24.74% at a cost of just under US$160 million.
Issuing an official announcement overnight, Suncity said that Summit Ascent would now be considered a subsidiary of the group and its financial statements consolidated into Suncity’s results. Summit Ascent holds a 60% stake in Tigre de Cristal operating entity Oriental Regent Ltd.
In a separate filing, Summit Ascent said it has raised around HK$1.62 billion (US$208.8 million) from the rights issue.
As previously reported by Inside Asian Gaming, Suncity is currently revising plans for the Phase II development of Tigre de Cristal, estimated to cost around US$200 million, which will double the number of existing gaming tables and slot machines at the property, increase lodging capacity and add new restaurants, bars, retail, an indoor beach club and convention space.
The company will also open a new VIP room once global COVID-19 travel restrictions ease and conditions normalise, with Suncity stating Wednesday its intention to drive business Tigre de Cristal’s way.
“Suncity has considerable expertise, the database and the operating experience required to grow Summit Ascent’s revenue,” it said.
“Not only does the gaming license granted by the Russian government last for an indefinite period of time, but Tigre de Cristal also benefits from lower gaming tax than other gaming jurisdictions, such as Macau.
“This means 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 Group Chairman Alvin Chau said he was “thrilled to see a second up-and-running integrated resort under Suncity in the year of 2020, amidst suboptimal business environment.
“I am amazed by the determination for Suncity to grow across Asia, and my team is executing my vision one step at a time. Gradually we are paving the way for Suncity to be a leading integrated resort operator and developer in Asia.
“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. 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 more Suncity integrated resorts are on their way, I am convinced that Suncity will become the most iconic entertainment name amongst Asia’s integrated resort scene.”