Hong Kong-listed Century Entertainment International Holdings Ltd. has announced the termination of its Cambodian gaming table acquisition deal. The subsidiaries failed to fulfill the conditions by December 31st of 2023.
The agreement pertains to eight gaming tables in a casino at Dara Sakor, Koh Kong Province, Cambodia.
According to the announcement released in February last year, the casino is operated by an entity called LongBay Entertainment Co. Ltd. The latter entered into a casino lease and operation agreement with a company called Lion King Entertainment Co Ltd, wholly-owned by Century Entertainment’s Chairman Ng Man Sun.
The deal allowed Lion King to lease the casino from May 1st, 2021, to April 30th, 2036. The deal originally involved a consideration of HK$58 million ($7.4 million).
According to the Tuesday filing, Century Entertainment notes that ‘a profit and loss statement and valuation for the three preceding financial years in the identifiable net income stream in relation to the New Gaming Table Business Rights must be reviewed by the auditors or reporting accountants to ensure that such information has been properly compiled and derived from the underlying books and records.’
The company points out that The Lion King can provide the underlying books and records for income and expense, including net gaming win, gaming tax, and food and beverage charge, which is categorized as a direct cost. However, ‘certain operating expenses, including staff cost and room and food charges were provided by Lion King based on estimation and no cost allocation was prepared.’
The Board emphasizes that the terms of the Termination Agreement are ‘fair and reasonable’ and ‘in the interests of the Company and the Shareholders as a whole’. The termination of the New Assignment Agreement has no impact on the operations or financial position of the Group.
Based on the termination agreement, the duties and obligations of VMG, Lion King, and Ng Man Sun under the New Assignment Agreement have been released and discharged. VMG has not paid any deposit in respect of the Assignment, and neither party shall make any compensation to the other.
Century Entertainment also revealed that the company is negotiating a casino lease and operation agreement for the operation of a VIP room in Long Bay, Dara Sakor, Cambodia, with LongBay Entertainment Co., Ltd., to carry out gaming activities with the relevant gaming license provided by LongBay Entertainment Co., Ltd.
