The loss of Amax Holdings’ contract to take high rollers to Melco Crown Entertainment’s Altira casino (formerly Crown Macau) caused the former’s shares to slump by up to 13.7 percent on the Hong Kong bourse.
The move by Altira’s management is seen in some quarters as a result of a 1.25 percent cap being imposed by the Macau government on commission paid to junkets for VIP roll. Amax sparked what amounted to a trade war back in December 2007 when it struck a record 1.35 percent commission deal with the then Crown Macau.
“At present, the board does not have sufficient information to assess the potential financial impact,” Amax said in a statement about the contract loss, adding that its profit and asset values could be affected, “depending on further talks and arrangements with all parties concerned”.
Amax raised HKD2 billion from a share placement in December 2007 to bankroll its junket aggregator deal with Melco Crown, whereby it pooled a group of about 10 major VIP junket agents to take high rollers to the then Crown Macau.
