Engineering firm Paul Y bets on Macau hotel-casino venture
After an unsuccessful bid to enter the film industry, Paul Y Engineering, is betting on gambling to revive its fortunes.
The engineering and property firm controlled by Charles Chan Kwok-keung plans to build a five-star hotel and casino on Macau’s Cotai Strip.
It said it had set a budget of about HK$6.5 billion for the project but did not elaborate under which casino operator’s gaming licence it would operate.
According to the Business Daily, the government is yet to give permission to include gaming facilities in the hotel. The service provider agreement, under which a project can use gaming rights of an existing casino operator, “has not yet been approved”, a source said to the Macau publication.
“PYE long has been trying to venture into other businesses to diversify,” said Francis Lun Sheung-nim, managing director of Lyncean Securities.
Last year Paul Y announced a joint venture with a Hollywood film company and Beijing’s Huayi Brothers but pulled back after it failed to raise enough money in a weak market.
Paul Y has now turned to Macau, a promising market. To fund the Macau project, it proposes to place 1.176 billion shares – 193.8 per cent of issued share capital and 66 per cent of enlarged share capital – and issue HK$2.4 billion of convertible notes.
Lun said the market welcomed the move. The firm’s shares rose 12 per cent to 93 HK cents on Tuesday, though investors took profit yesterday and the stock closed at 90 HK cents.
Christfund Securities research director Simon Lam Ka-hang said the stock’s advance reflects the optimism over the gambling business, but added it is too early to predict how the new venture will pan out.