Casinos in South Korea: Shin Hwa World to issue US$25.7m in bonds

The net proceeds from the bond issuance will be used for general working capital and business development.

South Korea.- Shin Hwa World Limited, the former Landing International Development, has announced that it will issue convertible bonds due in 96 months worth HK$200m (US$25.7m). It will have the option of a 24-month extension at its discretion.

The company said net proceeds would be used for general working capital and business development. The aim is to diversity funding sources. The bonds are expected to carry an annual interest rate ranging from 5 per cent to 8 per cent and will not be listed on an exchange.

In the first half of 2024, Shin Hwa World reported a net loss of HK$231.5m (US$29.7m), up from a HK$394.3m (US$50.5m) loss a year earlier. Group-wide revenue was up 25.5 per cent year-on-year to HK$524.7m (US$67.3m).

Net gaming revenue grew 380 per cent to HK$114.9m (US$14.7m). Non-gaming revenue was HK$339.3m (US$43.5m), down 2 per cent, with a segment loss of HK$115.4m (US$14.8m). The property development segment, related to the sales activities of resort condominiums and villas in part of Jeju Shinhwa World saw a 92 per cent increase in profit to HK$30.9m (US$4m).

In June, the company completed a capital reorganisation and rights issue. The stake of Yang Zhihui, the former chairman and executive director of Shin Hwa World Limited was diluted to 9.74 per cent while public shareholders’ ownership was diluted from 36.16 per cent to 26.45 per cent. The company said the rights issue generated net proceeds of HK$258.6m (US$33.1m).

The company’s largest substantial shareholders are now Pauline Lam and Zhang Tingting, holding 17.96 per cent and 16.67 per cent, respectively. The underwriter and the 16 subscribers procured by the underwriter now collectively hold a 29.18 per cent stake.