Macau casino investor Amax International Holdings has denied reports that Suncity Group and its Chairman Alvin Chau has taken over Macau’s Beijing Imperial Palace Hotel, claiming instead that Suncity has been issued a court order to leave after “invading” the property.
The claim comes a day after Suncity’s Executive Director, Andrew Lo, said in an interview with Hong Kong’s Ming Pao Daily News that Chau, via his company Victory Success Holdings Limited, had gained control of the property – home of Greek Mythology casino – and planned to revitalize it.
In a filing to the Hong Kong Stock Exchange on Wednesday, Amax, which holds a 24.8% stake in Greek Mythology, said, “The company was informed by the hotel management that the hotel management is still in charge of the hotel and in no event the control rights of the hotel has been passed to Mr Chau.
“In addition, the hotel management obtained a court order from Juizo Civel do Tribunal Judicial de Base of Macau on 17 May 2018 which has judged that Victory Success Holdings Limited has invaded the hotel property and ordered them to leave the hotel and return it to the hotel management within five calendar days.
“The hotel management is of the view that the Court Order could further protect their control rights of the hotel.”
Beijing Imperial Palace Hotel, now known as New Century Hotel, was run by Macau Hotel Developers Ltd with Entertainment Group Corporation running Greek Mythology until the hotel was ordered to close by the Macao Government Tourism Office (MGTO) in 2016 due to what MGTO director Maria Helena de Senna Fernandes described at the time as “serious administrative irregularities which constitute threats to public safety.”
They included “serious fire safety issues including an inadequate number of fire extinguishers, defective emergency lightning system, blocked exits, obstructed escape routes, malfunctioning smoke chamber, use of decorative materials without fireproofing and storage of fuels beyond legal limits, amongst others.”
The hotel’s license was subsequently revoked in January 2017.
Amax has since been looking to reopen casino operations but stated recently that it “has been trying but failed to contact the management of Greek Mythology to understand the current situation of Greek Mythology which led to uncertainty on the development of Greek Mythology.” Amax’s Chairman and CEO, Ng Man Sun, has been asking to be legally appointed as administrator since June 2017.
In its filing this week, Amax said, “The company is of the view that the status of Greek Mythology remains unchanged as at the date of this announcement, and that the legal proceedings to apply to the Macau Court for the appointment of Mr Ng Man Sun, the Chief Executive Officer and Chairman of the Company, as the administrator of Greek Mythology is still under progress.”
Transition time
Boutique investment bank and advisory firm Union Gaming highlighted in a Wednesday note that the reported takeover of Imperial Palace was in-line with Suncity’s recent moves to become a casino operator, stating “VIP junkets in general, and Suncity in specific, are transitioning from the agency to the principal model as they seek more stability and superior economics.”
The property, located opposite to Melco’s Altira, could be refurbished “in order to create larger rooms more suited to VIP clientele,” Union Gaming’s Grant Govertsen believes, although it would take at least two years to renovate to Suncity standards.
Suncity has been trying to diversify and expand its business model for some time. According to Govertsen, its Crown International Club in Da Nang, Vietnam is yielding volume figures similar to Macau’s VIP rooms. The analysis also states that this shows Suncity’s capacity to move their clientele among their different locations.
This strategy has led many to believe that Suncity will look to become Macau’s seventh concessionaire when the re-tendering process begins in the next few years.
“This clearly represents a risk to Macau’s Big 6 in the out years as their primary VIP vendor becomes increasingly competitive with them, while other of their VIP vendors look to pull off similar feats,” Govertsen says.
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