LET Group Holdings, a Hong Kong-listed investment holding company, has announced that its agreement to formally sell the licensee of its Tigre De Cristal Resort, located in Vladivostok, for $116 million, has been encouraged by uncertainties over the conflict between Ukraine and Russia.
Resignations due to disapproval of the sales contract:
The said firm also unveiled that every single one of its independent non-executive directors has officially left the firm due to their disagreement of the aforementioned agreement, which took effect on Jan. 15, according to the same filling with the Hong Kong Stock Exchange.
In this sense, the ruling opposed by the aforementioned directors included the sale by Oriental Regent Ltd., a non-wholly-owned indirect division of LET Group, to officially sell the whole shares in its entirely-owned G1 Entertainment LLC, the business that owns the gaming authorization for the aforementioned Tigre de Cristal officially given by the Russian government, to the Russian entity Dalnevostochniy Aktiv LLC.
Furthermore, the agreement is estimated at $116 million as mentioned above. In addition, the money will be paid to the Russian firm in Chinese yuan, and the agreement will be finished outside of Russia, because of the sanctions foisted on the said country. In addition, when the agreement was revealed, Oriental committed that if the transaction gets finished, it would give back the firm’s $28 million investment, and the firm’s coming exposure to the regulated market of Russia would be decreased to 0.
The aforementioned investment holding firm and its affiliate Summit Ascent Holdings Ltd. defended the sale citing “uncertainties arising from the ongoing Russia-Ukraine conflict and related sanctions imposed on the Russian Federation, which are adversely affecting the operations and prospect of G1 Entertainment” as the reason for it, according to Asia Gaming Brief.
In this regard, the firm added: “Further announcement will be made by the company if and when appropriate after due consideration and evaluation.”
Regardless of the directors’ departure, LET Group and Summit Ascent individually revealed that just Andrew Lo Kai Bong, a casino investor, stayed as chairman and director of both firms.
Also, consideration of the $116 million price tag would benefit shareholders such as Taiwan-based Firich Enterprises Co Ltd. This company holds a 20 percent share in Oriental Regent and is reportedly looking forward to raising $28 million in cash from the sale.
With a 77.5 percent share in Oriental Regent Ltd, Summit Ascent may capitalize significantly on the contemplated $116 million sale. With Firich expecting $28 million from its 20 percent share invested in the deal, Summit Ascent could raise about $85 million and offset negative impact of the loss it suffered in 2023.