Massive Resources fails to extend rally from gaming deal
Shares in Massive Resources International Corp, which more than doubled on Monday after the company said it would pay HK$140 million for a share in profits from a high-stakes gaming room at the Sands Macao casino, fell yesterday.
Massive, whose largest shareholder is controversial Legislative Council member Chim Pui-chung, will acquire an indirect effective interest of 0.08 per cent of the VIP gaming chip turnover at the Sands' five-table Chengdu VIP room.
The room was operated by Hou Wan, a licensed Macau gaming junket controlled by veteran VIP operator Guo Nan, Massive said. Hou Wan in turn relies on 500 freelance junket agents to bring in high-rollers, lend them money and collect debts.
Massive, formerly known as Mandarin Resources Corp, did not disclose chip turnover figures for the operation.
Mr Chim, who represents the financial services sector, holds 12.75 per cent of the company's shares.
Well known for his nickname 'Angry Man from Chiu Chow', Mr Chim served jail time in the late 1990s after the High Court ruled he had harmed the interests of the company's minority shareholders.
Under a complex deal, Massive will acquire Credible Ltd, a British Virgin Islands company owned by Mr Guo. Credible has a 20 per cent interest in Base Move Investments, another British Virgin Islands firm owned by Mr Guo, which in turn receives 0.4 per cent of the VIP chip turnover from the Chengdu room.
Massive's effective interest in gross chip turnover works out to 0.08 per cent.
The deal also grants Massive a two-year call option to acquire a further 30 per cent of Base Move from Mr Guo for HK$350 million.
Massive will also change its name to Neptune Group to reflect its planned expansion into Macau. The company owns a gaming cruise ship named the Neptune.
Several listed firms are indirectly interested in the profits from high-stakes gaming rooms in Macau.
In September last year, former timber-trading company Teem Foundation said it would pay HK$539 million for a share of profits from two other VIP rooms at the Sands and Wynn Macau casinos.
That deal gave Teem an effective 0.19 per cent interest in VIP chip turnover at the Sands' eight-table Shanghai room and six VIP tables at the Wynn.
Shares in Massive soared 122.73 per cent on Monday on resumption of trading following their suspension on January 17. Yesterday, they dropped 18.37 per cent to close at four HK cents.