Summit sells Crystal Tiger licence due to Russia-Ukraine conflict
Summit Ascent has confirmed the US$116m sale of G1 Entertainment, the Tigre de Cristal casino licence holder, citing uncertainties from the Russia-Ukraine conflict.
Russia.- Summit Ascent Holdings has confirmed that one of its majority-owned subsidiaries will sell G1 Entertainment, the gaming licence holder of the Tigre de Cristal casino resort in the Russian Far East, for US$116m.
The company has revealed the decision was made due to “uncertainties arising from the ongoing Russia-Ukraine conflict,” despite the “disapproval” of most of the board at Summit Ascent and its Hong Kong-listed parent Let Group Holdings.
The stock of Summit Ascent has been in trading suspension on the Hong Kong Stock Exchange since January 11 and will remain suspended “pending the publication of the inside information announcement” as defined under bourse rules.
Summit Ascent and LET Group had previously announced on January 15 that only casino investor Andrew Lo Kai Bong had remained as a director and chairman for both companies after the other directors of the respective firms had resigned due to “disapproval” of the deal.
In a statement released on Wednesday, Summit Ascent said: “The disposal will… proceed in view of the uncertainties arising from the ongoing Russia-Ukraine conflict and related sanctions imposed on the Russian Federation, which are adversely affecting the operations and prospect of G1 Entertainment.”
Last August, Summit Ascent Holdings posted a net loss of HK$16.1m (US$2.1m) for the first half of the year. The primary factor was exchange losses amounting to approximately HK$35.2m stemming from fluctuations in the Russian ruble, with its fall contrasting to HK$157.1m in exchange gains in the first half of 2022.
The company’s revenue from gaming and hotel operations at Tigre de Cristal rose by 2.3 per cent year-on-year to HK$182m. Revenue from gaming operations declined from HK$167.6m to HK$167.3m. Earnings before interest, taxation, depreciation, and amortization (EBITDA) fell 5 per cent year-on-year, to HK$57m.
The initial information about the sell-off exercise in the G1 Entertainment entity came from Taiwan firm Firich Enterprises on January 10. Its unit Firich Investment has a 20 per cent stake in Oriental Regent, with 77.5 per cent owned by Summit Ascent. Firich Investment’s share of the proceeds is said to be US$28m.
The buyer of G1 Entertainment is Russian entity Dalnevostochniy Aktiv, according to a filing by Firich Enterprises to the Taiwan Stock Exchange.
There are currently two casinos in the Primorye Gambling Zone in Russia. Summit Ascent’s Tigre de Cristal opened to the public in 2015. It was followed almost five years later by Shambhala, which opened at the height of the Covid-19 pandemic.
