South Korean gaming operator Shin Hwa World has announced its plan to issue 845.25 million new shares, aiming to generate approximately HK$28.5 million ($3.6 million) in net proceeds.
The primary allocation of these funds is designated for ‘upgrade, repair, and maintenance of the existing building, equipment, and facilities within Jeju Shinhwa World,’ as revealed by filing to the Hong Kong Stock Exchange.
The revamp work is estimated to cost about HK$14 million ($1.8 million). An additional HK$10 million ($1.3 million) will be allocated for covering interest expenses, while approximately HK$4.5 million ($580,000) will be earmarked for sales, marketing promotions, and advertising expenses.
Jeju Shinhwa World is an integrated leisure and entertainment resort located on Jeju Island, South Korea, featuring an exclusively foreigner-only casino.
The company has stated its intention to issue the new shares at a subscription price of HK$0.034 each, representing a discount of approximately 19 percent from the closing price of HK$0.042 per share on Friday, March 1st.
Trading in Shin Hwa World shares on the Hong Kong Stock Exchange resumed on Tuesday, following a suspension the previous day at the company’s request and preceding the announcement of the share issuance.
According to its latest financial update released last Friday, Shin Hwa World issued a profit warning for 2023, with the company expecting a loss of between HK$450 million ($57.5 million) and HK$540 million ($69 million).
The group notes that the expected increase in loss was mostly attributable to ‘the pressure on the room price and occupancy rate due to intense competition and domestic customers traveling abroad after the easing of travel restrictions,’ leading to less revenue from the integrated resort segment.
