Macau junket investor Neptune Group Ltd has completed a deal to acquire a 30% stake in Ever Praise Enterprises – owner of a Kowloon, Hong Kong property currently leased to Harbour Bay Hotels – as well as the entire stake in Harbour Bay Hotels.
The deal comes at a total cost of HK$204 million, of which HK$189 million comprises 30% of the issued share capital of Ever Praise and 60% of the outstanding indebtedness owing by Ever Praise.
Neptune acquires Harbour Bay Hotels – which provides hotel management services – at a cost of HK$15 million.
In a filing to the Hong Kong Stock Exchange, Neptune Group said that Harbour Bay Hotels had recently signed a lease with Ever Praise to continue leasing the property until at least 30 April 2022, with rent to be paid at a rate of HK$544,500 per month from 1 May 2019 on top of the current lease deal, which commenced on 1 May 2015.
“The Board is pleased to announce that all respective conditions precedent to the EP Acquisition Agreement and the HB Acquisition Agreement have been fulfilled and therefore EP Completion and HB Completion took place simultaneously on 26 June 2017,” Neptune Group said.
“Upon EP Completion, Ever Praise has become an associate of the Company and its financial results will be equity accounted for in the consolidated financial statements of the Enlarged Group.
“Upon HB Completion, HB Hotels has become an indirect wholly-owned subsidiary of the Company and its financial results will be consolidated into the financial statements of the Enlarged Group.”
Neptune Group reported net profit of HK$25.9 million for the six months to 31 December 2016, however its Macau junket operations took a hit earlier this month when the Venetian Macau terminated an agreement with Neptune junket partner Hao Cai to operate 14 VIP tables at its property. Revenue contributed by Hao Cai had accounted for more than 40% of the group’s 2016 revenue.
