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HomeNewsSouth KoreaNew Silkroad sells majority stake in Jeju's MegaLuck casino to offset losses

New Silkroad sells majority stake in Jeju’s MegaLuck casino to offset losses

New Silkroad Culturaltainment Limited has agreed to sell its stake in the MegaLuck casino on Jeju Island, South Korea for about $3.6 million, in order to mitigate its losses.

The Hong Kong listed company revealed the completion of a deal to sell a 72 percent stake in its subsidiary MegaLuck Company Limited on June 11th to Yu Cheng Kuo for a cash consideration of KRW5 billion ($3.6 million).

Yu currently holds a 7 percent stake in MegaLuck and is an independent third party in New Silkroad Culturaltainment.

The first installment of KRW0.5 billion ($363,172) will be made within 10 business days of signing the agreement, with a second installment of KRW 2.25 billion ($1.6 million) due by December 20th, 2024, and a third one of the same amount due by June 30th, 2025.

The agreed price follows a valuation by an independent valuer of the casino share stake of approximately KRW4.9 billion ($3.5 million).

New Silkroad Culturaltainment Limited is an investment holding company involved in integrated resorts and cultural tourism in South Korea, real estate in Australia, wine production in China, and property management services.

The company stated that the sale stems from a strategic shift to mitigate ongoing losses in the entertainment segment, with the proceeds, estimated at HK$26 million ($3.3 million), to be reinvested to enhance the group’s cash flow and working capital.

New Silkroad said it had incurred losses in its entertainment business of HK$283 million ($36,2 million), HK$12 million ($1.5 million) and HK$65 million ($8.3 million) in each of the past three financial years through December 31st, 2023.

‘This move is part of a broader strategy to realign resources towards more profitable ventures amidst a slow global economic recovery impacting tourism,’ the company added.

‘This transaction marks a significant restructuring effort by New Silkroad Culturaltainment, positioning the company for a more sustainable financial future.’

The completion of the sale is contingent upon several conditions, including the payment of the first installment, the registration of the share transfer, and the resignation of the vendor’s nominee director.

Nelson Moura
Nelson Mourahttp://agbrief.com
Editor and reporter with 10 years of experience in Greater China, namely Taiwan and Macau, in printed and online media, with a focus on finance, gaming, politics, crime, business and social issues.

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