Star Cruises to gain HK$410m from sale of Singapore holding

PUBLISHED : Thursday, 29 March, 2007, 12:00am
UPDATED : Thursday, 29 March, 2007, 12:00am

Star Cruises will book a gain of about HK$410 million from the sale of its stake in a Singapore casino resort project to sister firm Genting International.

The Hong Kong-listed company said yesterday it would divest its 25 per cent stake in the US$3.4 billion Resorts World at Sentosa to Genting International for HK$1.3 billion, which represents a 45 per cent premium over Star Cruises' capital contribution to the Singapore partnership to date.

The deal, which was announced earlier this month, was spurred by Singapore regulators' concern over granting a casino licence to companies directly associated with Macau magnate Stanley Ho Hung-sun, who along with fourth wife Angela Leong On-kei acquired a 4.6 per cent stake in Star Cruises in January.

As part of the agreement between the two firms controlled by Malaysian conglomerate Genting Group and chairman Lim Kok Thay, Star Cruises is taking over Genting International's stake in the Macau casino project both had signed on to build, and which Mr Ho is going to operate.

The gain announced yesterday falls far short of the additional HK$875 million in development costs Star Cruises must shoulder for the HK$4.7 billion Macau project.

The development calls for a HK$4.7 billion casino and boutique hotel to be built on an 87,000 square foot patch of reclaimed land opposite the newly opened Wynn Macau.

Star Cruises would have a 75 per cent stake in the venture while local partners Yany Kwan Yan-chi and his brother Kwan Yan-ming, who together contributed a portion of the land, will take up the remaining 25 per cent.

Mr Ho's licensed gaming unit Sociedade de Jogos de Macau is slated to operate the casino.

It remained uncertain whether the restructuring would mollify Singapore gaming regulators' concerns about allegations associating Mr Ho's Macau casinos with organised crime groups, money laundering and loan sharking. Mr Ho has repeatedly denied those allegations.

The city state's Casino Regulation Division has yet to issue a gaming licence for the Sentosa resort and is conducting investigations into the 'suitability' of the management, shareholders and other associates of the would-be casino operators.

Shares of Star Cruises fell 2.2 per cent yesterday to close at HK$2.22.