Oriental Regent Limited, the operator of the Tigre de Cristal Resort, plans to sell the entire stake in its wholly-owned G1 Entertainment LLC to a Russian firm. The deal is valued at $116 million, which will be paid in Chinese yuan.
G1 Entertainment possesses a gaming license for Tigre de Cristal, which the Russian government has officially granted.
Oriental Regent’s controlling entity, Summit Ascent, and related company LET Group halted trading on the Hong Kong Stock Exchange on Thursday, stating “pending the release of an inside information announcement.” However, the sale was disclosed first by another shareholder, Firich Investment Ltd., through a filing on the Taiwan Exchange on Wednesday.
According to the statement, Firich Investment holds 20 percent of the shares of Oriental Regent. Its fully-owned subsidiary, G1 Entertainment LLC, is about to be transferred to the Russian company called Dalnevostochniy Aktiv LLC.
The acquisition will be completed out of Russia. Russian authorities have recently imposed foreign exchange controls and required disinvested foreign companies to sell assets at a discount and impose a 10 percent transaction tax.
In light of these events and the possibility of further controls in the future, the Board of Directors of the Company has approved Oriental’s aforementioned sale of G1, stating that “If the transaction is completed, Oriental will return the company’s investment of $28 million, and the Company’s future exposure to the Russian market will be reduced to zero.”
Firich stated that the transaction would result in a “negative impact” of approximately $18.4 million on the 2023 balance sheet.
According to the latest interim report, Summit Ascent owns 77.5 percent of Oriental Regent.
