Lawrence Ho Sells Stake In Summit Ascent Amidst Russia Concerns
Hong Kong casino tycoon Lawrence Ho has decided to sell his 17.37% stake in Summit Ascent Holdings Ltd. The sale which is reported to be done via a placing agent is expected to be finalized before the end of this week. Summit Ascent is the company that operates the popular Tigre de Cristal casino in Vladivostok, Russia.
Ho had already sold his stake of the company down to 27.71% earlier in 2017. However, he still owns 1.34% of the company’s issued share capital directly and another 16.03% through his subsidiary Quick Glitter. Ho is expected to complete the sale of his 258,634,464 shares on Wednesday which should go at a rate of HK$1.05. The sale should fetch him around HK$271.6 million in total. The shares are expected to be purchased by Taiwan listed shipping operator First Steamship Co Ltd.
In a statement, gaming analyst Grant Govertsen said
We had downgraded shares of Summit Ascent last month due to a variety of factors, including that the company’s Chairman, Lawrence Ho, had begun to pare down his holdings. At the time our view was that Mr. Ho likely saw better opportunities elsewhere given the confluence of factors that have kept the Vladivostok market from reaching its full potential
Market analysts believe that the casino tycoon has decided to sell his Summit Ascent shares because there are growing concerns over Russia’s casino industry. The concerns evolve around the proposed gaming tax that Tigre de Cristal will have to pay in the near future. Analysts expect the gaming tax rate to double by 2018 and will continue to increase in the coming years depending on the outcome of a draft bill that is being reviewed by the Russian Federation.
Another pressing concern is the amount of illegal gaming venues that are cutting into Tigre Cristal’s gaming revenue. Summit Ascent had posted a loss of $600,000 for the first half of 2017. The other major concern is that it will be very difficult for Summit Ascent to continue with Phase II of the Tigre de Cristal project giving the growing concerns in the Russian market.
Summit Ascent had said in August that they were confident that the first stage of Phase II would open by the second half of 2019.
Lawrence Ho is the chairman of Melco International Development Ltd which runs successful casinos in Macau and the Philippines. The company has several other projects in the pipeline and has expressed interest to also develop casinos resorts in markets like Japan, Cyprus and Spain.
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