Inside Asian Gaming

INSIDE ASIAN GAMING | November 2012 44 Briefs Regional Briefs being left behind. When, on 18th October, MGM China announced it had received its land concession contract, it appeared SJM might be passed over. Then on the evening of 19th October, SJM announced it had also received its land concession contract from the government. With a budget of approximately HK$20 billion (US$2.5 billion), MGMChina’s resort plans to include approximately 1,600hotel rooms, 500 gaming tables and 2,500 slots built on a site of 71,833 square meters. The resort is slating more than 85% of gross floor area for non-gaming offerings, including restaurant, retail and entertainment offerings. SJM plans to develop a resort on a 70,468-square-meter plot within a total approved building area of 521,435 square meters. Plans call for a casino with up to 700 gaming tables and 1,000 slot machines, a full range of non-gaming facilities, including dining, shopping and entertainment, and approximately 2,000 hotel rooms and suites. Visitation to Cambodia Up 23.6% Cambodia’s Ministry of Tourism reported 15.7% year-on-year growth in visitation to 242,747 in September. On a year-to-date basis, visitor arrivals have increased 23.6% to 2,577,540. Vietnam accounted for the highest single share of arrivals year to date (22.5%) at 579,886, an increase of 25.4%, followed by Korea and China at 306,550 (+23.9%) and 234,436 (+32.1%), respectively. The government is projecting 500,000 Chinese visitors by 2015 and 1 million by 2020. There were 247,197 arrivals from China in 2011, when the country recorded a 15% increase in visitation to 2.9 million. According to Union Gaming Research Macau: “Building on this strength, all nine months of 2012 have seen at least 15% growth, but some were higher, which results in nearly 25% growth year to date. We believe the continued strength in inbound visitation to Cambodia, particularly from Vietnam (who account for ~40% of mass-market gross gaming revenue at NagaWorld) and China (~10% of mass-market GGR), will continue to benefit NagaWorld’s mass- market segment. The government recently announced plans to build a second Permira Sells Remaining Galaxy Stake Private equity giant Permira has sold its remaining stake in Galaxy Entertainment Group, capping a highly profitable investment that nearly tripled in value over the past five years, reports Reuters . Permira sold its final 5.94% stake in Galaxy on 8th November, a day after the shares reached a record high and just two weeks after GEG reported better-than-expected third-quarter results. Europe-based Permira had bought into Galaxy in 2007 and endured a roller-coaster ride with its investment, which was down more than 90% in value in late 2008 when the stock fell to HK$0.50, resulting in Permira being criticized for having taken a minority stake without effective control. The sale of the last portion of the stake, some 249.6 million shares, was made at HK$27.17 per share. Including two previous sales in August of this year and September 2011, Permira has raised a combined HK$17.5 billion from selling off its 20% stake in the casino company, which it originally acquired for HK$6.53 billion. The final sale follows months of speculation over a possible divestment by Permira and may lend support to Galaxy’s shares, according to JPMorgan analyst Kenneth Fong. “People were concerned about the placement, but now with the overhang gone, it should boost sentiment,”Mr Fong said. Founded in 1985, Permira advises funds with a total committed capital of approximately €20 billion (HK$196.7 billion/US$25.5 billion). In the last five years it has invested around US$2.5 billion, or nearly a quarter of its global fund of €10 billion, in four companies in Asia: Japanese agrochemical company Arysta LifeScience, sushi restaurant chain Akindo Sushiro, Asia Broadcast Satellite and Galaxy. Other companies in its portfolio with a presence in fast-growing Asia include German fashion house Hugo Boss. GEG reported strong third quarter financial results. Group revenue increased 6% year on year to HK$14 billion (US$1.8 billion), and EBITDA jumped 46% to HK$2.6 billion, marking GEG’s 16th consecutive quarter of EBITDA growth. A key factor in the improved earnings was the strong performance of both its flagship properties in the mass segment, with Galaxy Macau registering year-on-year growth of 79% and StarWorld posting a gain of 43%. GEG’s total VIP volume of HK$320 billion was down 7% year on year, attributable to the impact of new supply in the market at Sands China’s Sands Cotai Central, in addition to various VIP room expansions at many flagship properties. SJM, MGM Approved To Build on Cotai In February this year, the director of Macau’s Lands and Public Works Bureau, Jaime Carion, indicated his department would likely approve this year just two of the three Cotai land grant applications— which had been made by Wynn Macau, SJM Holdings and MGM China Holdings. Wynn Macau’s land concession was approved on 2nd May, resulting in the possibility of either SJM or MGM China NagaWorld in Phnom Penh, Cambodia