Star Cruises, Stanley Ho team up on HK$4.7b casino hotel in Macau

PUBLISHED : Wednesday, 24 January, 2007, 12:00am
UPDATED : Wednesday, 24 January, 2007, 12:00am

Shares in Star Cruises, the world's third-largest cruise line, rose as much as 64.43 per cent yesterday and trading volume surged almost 8,000 per cent after the company unveiled plans for a HK$4.7 billion casino hotel in Macau as part of a partnership with gaming magnate Stanley Ho Hung-sun.

Star Cruises yesterday said it would team up with Singapore-listed sister firm Genting International and two local partners to fund and build the casino.

The project will be on prime waterfront property near Macau's city centre and operate under the umbrella of Mr Ho's licensed gaming company, Sociedade de Jogos de Macau (SJM).

In turn, Mr Ho and his fourth wife, Angela Leong On-kei, yesterday subscribed to 160 million new Star Cruises shares, at HK$2.29 per share, representing 2.3 per cent of the company.

They also bought 160 million share options, which when exercised will increase their interest in the company to 4.6 per cent.

The deal will require approval from Singapore's gaming regulator.

'Genting has always wanted [to enter] Macau,' said one analyst.

The deal also gives Mr Ho exposure to Singapore's budding casino industry through the Star Cruises stake. 'It looks like an alliance of the incumbents.'

Star Cruises and Genting, both units of Kuala Lumpur-listed Genting Berhad and controlled by the family of Genting Highlands casino resort founder Lim Goh Tong, last month won the right to build a US$3.4 billion casino resort on Singapore's Sentosa Island.

Under Singapore's Casino Control Act, which came into effect in June last year, the gaming regulator has the right to block casino licence holders from any venture where it deems new business associates to be 'unsuitable'.

Senior gaming officials in the city state yesterday declined to comment directly on the tie-up between Star Cruises and Mr Ho, referring inquiries back to the text of the casino legislation.

Star Cruises, in an announcement to the stock exchange, said the agreement would terminate automatically if the Genting units failed to obtain approval from the 'relevant regulators' by March 19. No further details were provided.

Kuala Lumpur-based spokesmen for the Genting companies declined to comment yesterday.

The Macau casino would include a boutique hotel on newly reclaimed land in front of the Hotel Lisboa and Wynn Macau. Star Cruises has an effective 56 per cent stake in the project, scheduled to open in 2009, while Genting International has a 19 per cent interest.

The remaining 25 per cent stake in the project is held by local partners Yany Kwan Yan-chi and his brother, Kwan Yan-ming, who contributed a portion of the land.

Shares in Star Cruises closed up 47.83 per cent at HK$3.74 yesterday.