Summit Ascent Holdings, the majority owner of Russian casino resort Tigre de Cristal near Vladivistok, says it has agreed to provide a revolving loan worth up to HK$500 million (US$64 million) to its parent company, LET Group Holdings.
According to details provided by both entities, the loan will be used by LET Group – formerly known as Suncity Group – to fully repay its existing loan and interest, to repay other outstanding liabilities and for business development and general working capital.
LET Group is majority owner of Summit Ascent with a 69.66% stake, holds a 34% stake in Vietnamese integrated resort Hoiana and is majority owner in Philippines-listed Suntrust Resort Holdings Inc, which is developing a US$1 billion casino-hotel in Manila’s Entertainment City.
The loan has been made possible by Summit Ascent’s decision to delay development of Tigre de Cristal Phase II due to the impact of the COVID-19 pandemic on tourism and uncertainty surrounding the impact of the ongoing conflict in Ukraine. Summit Ascent had planned to utilize HK$479.3 million (US$61 million) from a 2019 placing of shares and 2020 rights issue for Phase II development but said it would now use these funds for the revolving loan.
“Having considered the commercial benefits to the SA Group in deploying the original portion of the net proceeds from the Rights Issue and the Placing for the Phase II development of Tigre de Cristal in the total amount of approximately HK$479.3 million as Revolving Loan and generating interest income to the SA Group for the moment, the SA Board is of the view that the proposed change in use of the original portion of the net proceeds from the Rights Issue and the Placing for Phase II development of Tigre de Cristal as Revolving Loan is fair and reasonable and in the interests of Summit Ascent and the SA Shareholders as a whole,” it said.
Under the terms of the loan arrangement, Summit Ascent will receive interest of 6% per annum on the amount drawn down by LET Group.
LET had previously reached an agreement with four independent third party lenders to provide a HK$400 million (US$51 million) loan facility in order to fully repay a Promissory Note, and had pledged its entire stake in Summit Ascent as collateral.
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