Paul Y shareholders approve Macau fundraising
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Hong Kong-based Paul Y Engineering's (PYE) shareholders yesterday approved a fundraising plan through share placement and convertible bonds for a high-end Macau tourist project.
The engineering and property firm said in November that it would tap into the world's largest gaming destination by building a luxury hotel and entertainment project in Macau's Cotai Strip, a new destination for gamblers.
PYE deputy chairman Tom Lau Ko-yuen said that the hotel, due to be completed in 2016, would have a "wow effect".
"We are targeting the VIPs among VIPs," Lau said.
According to PYE chairman James Chiu, the Macau project has a "bright future" and will enable the company to realise the business diversification it has been seeking.
Last year PYE 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.
"For sure Macau is not short of five-star hotels, but ours will be a seven-star one," he said.
The planned project will have 230-odd suites, sized from 2,200 square feet to 15,000 sq ft, and will offer two floors of gaming rooms with 66 tables, subject to the approval of the Macau government.
The company has said it will co-operate with one of the six casino operators with a gaming licence, but has not elaborated.
Chiu said he disagrees with the market perception that the growth of the high-roller VIP segment will slow. "The VIP business has only one way to go, that is to grow larger and larger," he said.
"The hotel tariff will be more than HK$10,000 per night" in the new complex, he added.
The project is estimated to cost HK$6.5 billion, according to the company. PYE plans to raise at least HK$3.2 billion by placing a minimum of 1.176 billion new shares at 68 HK cents each, and from the issue of additional new shares or convertible bonds.
The firm will also have the option of raising another HK$1.6 billion by increasing the number of shares or convertible bonds on offer if demand exceeds supply.
Shares in PYE dropped 6.14 per cent yesterday, closing at HK$1.07, on a day the Hang Seng Index remained flat.