Hong Kong-listed Summit Ascent, the controlling shareholder in Russian integrated resort Tigre de Cristal, says it wants to increase its stake in Suntrust Resort Holdings – the Philippines company currently developing a US$1.1 billion hotel and casino in Manila’s Entertainment City.
The company’s long-term plan was referenced as part of its 1H23 financial results, published this week, in which Summit Ascent detailed efforts to diversify its offerings given ongoing concerns over the viability of the Russian market.
With international sanctions still impacting Tigre de Cristal’s operations as a result of the Russia-Ukraine war, Summit Ascent’s group-wide revenue in the first half of the year was largely flat at HK$182 million (US$23.2 million), while Adjusted EBITDA fell slightly year-on-year to HK$57.0 million (US$23.2 million). The company reported a loss attributable to owners of the company of HK$16.1 million (US$2.1 million) versus a 1H22 profit of HK$85.2 million (US$10.9 million) – mainly due to recognition of exchange losses caused by the fluctuation of the Russian Ruble exchange rate.
It is under these circumstances that Summit Ascent has looked to diversify its interests across Asia, including the issuance of loans and subscribing to convertible bonds in Suntrust with a view to claiming a financial stake once the Manila project opens its doors in late 2024.
In Tuesday’s filing, Summit Ascent said it had subscribed to the Suntrust bonds due to its own “engrained knowledge of the gaming sector” which made it “naturally inclined … to seek one of the best and one of the most rapidly growing emerging gaming markets in Asia – the Philippines.
“The recent announcement of the Group’s restructuring of its financial assistance to Suntrust is a step towards that direction,” Summit Ascent said.
“It is aligned with our goal of eventually achieving higher potential ownership of Suntrust for capital appreciation while ensuring the significant amount of the convertible bonds already invested in the project is preserved as construction of the new integrated resort in Manila is building in progress and expected to commence operations in 2024.”
The company also acquired a parcel of land from its parent company, LET Group – also the parent of Suntrust – in July upon which it wants to develop a luxury hotel with seaside cabins. The Japan project is aimed at creating synergies and cross-selling opportunities with the group’s other integrated resort offerings.
“The acquisition is consistent with the Group’s strategy to diversify its geographical presence in Asia and allocate the surplus capital towards investments that have the potential to generate the highest returns,” it said.
Summit Ascent reiterated its intention to delay a previously planned expansion of Tigre de Cristal until the geopolitical environment is significantly improved.
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