Hong Kong-listed Summit Ascent Holdings says it has postponed the Phase II development of its Russian integrated resort, Tigre de Cristal, as result of ongoing uncertainties around the COVID-19 pandemic and Russia’s war on Ukraine.
Publishing its FY21 financial results overnight, which included a 26% year-on-year increase in revenue to HK$266 million (US$34 million), Summit Ascent said its expansion of Tigre de Cristal, located in the Primorye Economic Zone near Vladivostok, would now be complete no earlier than 2025.
However, it could be later still with the company monitoring the situation in Ukraine and the impact of sanctions currently imposed on Russia by much of the world.
“The Group’s integrated resort Tigre de Cristal is operating in the Russian Far East and has been self-sustaining without any bank borrowings,” Summit Ascent said.
“However, we shall have to adjust our operations to the reality of a volatile business environment and try to find ways to do business within the new constraints we may face including, but not limited to, the payment platform for further capital investment for the Tigre de Cristal Phase II, loan repayment and dividend repatriation to its parent companies in Hong Kong, settlements with the overseas customers, suppliers, and service providers, and the increased operating costs due to the inflation and supply-chain disruptions.
“The Board has been closely monitoring the market conditions, and assessing the short-term and long-term implications of the geopolitical tensions, the Group’s working capital requirements as well as funding requirements for its projects under development.
“The Board will base [resumption of Phase II development] on the [situation in Russia] and perform further assessment of its impact on the Group’s financial performance and take relevant measures.”
Summit Ascent said that US$60 million raised during a 2021 rights issue which saw Suncity Group acquire a controlling 69.66% stake in the company, originally intended for the Tigre de Cristal Phase II expansion, would now be put aside to generate interest income.
Tigre de Cristal is the second IR in the Primorye Economic Zone to put development on hold with NagaCorp having announced earlier this month that it was indefinitely suspending the development of its project, Naga Vladivostok.
It also comes after the company’s Chairman, former Suncity Group CEO Alvin Chau, stepped down in December following his arrest in Macau for alleged criminal association, illegal gambling and money laundering. Summit Ascent said it has yet to appoint a replacement, with Deputy Chairman Andrew Lo currently filling the role on an interim basis.
The group’s FY21 financial results included a return to positive EBITDA of HK$40.9 million in 2021, although loss attributable to owners of the company was HK$230 million (US$29 million) in 2021 compared to a profit of HK$10.0 million (US$1.3 million) in 2020.
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