Imperial Pacific said its share of profit from a Macau junket venture has fallen short of the agreed amount and the vendor will pay the shortfall.
In a filing with the Hong Kong Stock Exchange, the company said the actual profit stream received from its investment in the Hengsheng Group was HK$10.73 million ($1.38 million). That’s less than half of the $24 million guaranteed under the original agreement.
As such the vendor will make up the shortfall. Convertible notes have been deposited with Imperial Pacific as a guarantee for the payment.
Those notes will only be released back if the vendor deposits the cash, or if the profit stream reaches or exceeds the guaranteed profit share.Junket operators, who facilitate gambling for China’s high rollers, have been hit hard by the decline in Macau gambling revenue. The VIP market has shriveled amidst a clampdown by Beijing on corruption. Iao Kun Group Holdings, which operates junkets in Macau, earlier this week reported the downturn had sent its December rolling chip volumes down 48 percent.