Two HK firms in junket deals worth HK$1.14b

PUBLISHED : Friday, 12 October, 2007, 12:00am
UPDATED : Friday, 12 October, 2007, 12:00am

Two Hong Kong investors in Macau's booming market for high-rolling gamblers yesterday announced deals worth a combined HK$1.14 billion.

China Star Entertainment, controlled by film producer Charles Heung Wah-keung, said it would raise its investments in VIP gaming junkets in the enclave, while Dore Holding's controlling shareholders are cashing out.

China Star will pay HK$516.9 million in cash, convertible notes and shares for the 49 per cent interest it does not already own in a junket operation that controls 10 baccarat tables at the Ocho VIP Club in gaming magnate Stanley Ho Hung-sun's newly opened Grand Lisboa casino.

China Star in August purchased an initial 51 per cent stake in the profits from the VIP business, launched on August 17, from junket operator Ng Cheuk-fai for HK$538 million.

Yesterday's deal entitles China Star to 100 per cent of profit from the Ocho junket operation, which is a commission of 0.4 per cent of Ocho's VIP gambling chip sales to high rollers.

From its launch until the end of last month, Ocho generated an average HK$5.935 billion in monthly chips sales for a net profit of HK$23.7 million per month.

In a separate deal, Dore said controlling shareholders Tony Yeung Ming-kwong and Liu Ching-hua were selling their stake in a private placement.

The HK$626.84 million deal will see financial investors Mr Yeung and Mr Liu sell off 206.88 million shares or a 17.7 per cent stake in Dore at HK$3.03 per share.

The pair originally paid HK$43.982 million for a 55 per cent stake in the company in 2004, then a timber trading firm known as Teem Foundation. Dore last year started investing in VIP junkets attached to the Wynn and Sands casinos.

Mr Yeung and Mr Liu retain a call option to purchase 118.75 million new shares or 9.22 per cent of the firm's enlarged share capital.

Macau's recent casino boom has been largely driven by junket operators, the marketing agents who bring in high-rollers lend them money and collect their gambling debts in exchange for a fixed commission on their gross sales of VIP gaming chips.

The enclave's revenue from VIP baccarat soared 58.3 per cent in the second quarter to 13.2 billion patacas and accounted for 67.5 per cent of all casino winnings in the territory.