Summit Ascension Limits Tigre Deckristal Phase 2 Expansion As COVID-19 Causes Closely 63% Revenue Drop In First Half of 2020

Hong Kong-based investment holding company Summit Accent Holdings Ltd (102: Hong Kong) is expected to begin the second phase of construction of the $200 million Tigred Crystal, located in Russia’s Maritime Integrated Entertainment Zone (IEZ) near Vladivostok, by the fourth quarter of this year.

However, the Asian casino operator has decided to consider diversifying its assets and revenue sources without further increasing the size of the Russian integrated resort’s second-phase expansion, the sources said.

Revenue Decline:

The casino investor, chaired by Macau junket promoter Alvin Chow, announced on Monday, reported a HK$47 million ($6.1 million) first-half loss, compared with a HK$42.8 million first-half profit for 2019. The group’s total revenue, combined with hotel and game operations, fell 62.7% to HK$96 million ($12.4 million) over the six-month period. Travel restrictions related to the COVID-19 pandemic have reportedly been blamed for the loss.

Forced shutdown:

Summit has suspended all game operations at Russian resorts after the government announced plans to block the border to control the spread of COVID-19. TIGRE DE CRYSTAL RECEIVES RUSSIAN CASINO RE-OPENED BY COAST STATE GOVERNOR

Summit Accent reportedly said the total estimated cost for this phase is currently $200 million, of which $120 million will be invested based on a 60% stake in Oriental Regent Regent Limited, the operator of Tiger de Crystal.

Target Opening:

Summit Ascent Holdings Limited’s earnings report includes the following…

“With the input of Suncity, we have reviewed and finalized the conceptual design of the recently redesigned Tigre de Cristal Phase 2 development and plan to begin construction with the aim of opening in Q4 2020

“The new integrated resort is expected to double the group’s VIPs, large game tables and slots and accommodate at least twice the capacity of existing accommodations. The second phase of Tiger de Cristal’s development will put the group in a better position to attract and retain customers, especially when other casino operators in IEZ Primary start operations in the near future.”

Controlling interest:

Summit Ascension, which holds a 24.74% controlling stake in the $91.5 million deal completed in April this year by Chairman Alvin Chow’s SunCity Group Holdings Inc., said it would choose to invest $800 million in SunTrust Home Developer Inc., a Philippine-listed company, to develop a casino in the Metropolitan Manila, instead of expanding Tigred Crystal further.

In May, SunCity Group Holdings subsidiary entered into an operational and management agreement with Westside City Resorts World for the operation and management of Westside City Resorts World’s main hotel and casino,

The Hong Kong-listed company will subscribe to HK$847 million ($109.3 million) in convertible bonds from SunTrust, which will be financed by SunTrust’s issuance of rights to increase its stake in Summit Ascension to 69.78%.

Best interests:

The company said…

“While directors are cautiously optimistic about Tigred Crystal’s long-term outlook in the Russian Federation, they take the view that diversifying assets and revenue sources is in the company’s best interest to reduce the group’s reliance on single revenue sources and locations.

“From a geographical diversity perspective, the company has been exploring other business opportunities to expand the group’s existing businesses and explore new markets with significant growth potential. Investment in SunTrust takes the first step in establishing a group’s presence in the casino and entertainment markets in the Philippines and enabling the group to enter these growing markets, as well as providing synergy across tourism partnerships with Suntrust and Suncity. 바카라사이트

“The directors find it more convincing to invest some of the net revenue in subscription rights issuance to achieve diversification than to expand the current second-stage development of Tigre de Cristal.”

Summit said in its earnings report on Monday that the group posted an adjusted property EBITDA loss of HK$22.1 million (US$22.9 million) at 1H20, but held HK$816.7 million (US$15.4 million) in cash to replace bank borrowing as of June 30 this year, maintaining a strong financial position.