Big sell-off for Galaxy after profit drops 20pc
Galaxy Entertainment yesterday was the city's most traded stock after Permira Advisers sold shares in the Macau casino operator.
The sale of the British private firm's stake came after Galaxy, controlled by the family of property-to-construction tycoon Lui Che-woo, reported a 20.4 per cent drop interim net profit on Wednesday.
Profit for Galaxy in the first six months fell to HK$378.75 million, down from HK$474.98 million a year ago. Permira said yesterday that it had completed the sale of a total of 270 million shares in Galaxy at a price of HK$17.70 per share.
The private equity firm netted a total of HK$4.78 billion from the sale, leaving it with 12.8 per cent of the casino operator.
In a statement released yesterday, Permira said it believed there were still 'very attractive long-term growth potential' for Macau and the Galaxy and that it intended to hold its remaining stake.
The British buyout firm paid HK$8.42 per share, or HK$6.53 billion, for a 20 per cent stake in Galaxy at the height of a previous bull run on casino stocks in November 2007 - a year before the global financial crisis.
Construction of new casinos in Macau came to a standstill following the crisis and revenue from gaming dwindled during the downturn.
Turnover reached HK$6.12 billion for Galaxy shares yesterday, which plunged 5.25 per cent to closing at HK$17.68, making it the most traded Hong Kong stock in terms of turnover. Macau casino revenue has made a strong comeback this year. Total revenue surged 57 per cent last month to a monthly record of 24.77 billion patacas - the fastest growth this year, according to the Macao Gaming Inspection and Co-ordination Bureau this week.
A report by Moody's Investor Service this week said that Macau's gaming revenues could increase 15 to 25 per cent annually.