Hong Kong-listed investment firm New Silkroad Culturaltainment Ltd has reached an agreement to sell its entire 72% stake in Megaluck Company Limited, the operating entity of MegaLuck Casino in Jeju, South Korea.
According to information filed overnight, the purchaser is Mr Yu Cheng Kuo – an individual investor who currently holds a 7% stake in Megaluck Company and who will pay a total of HK$28.4 million (US$3.6 million) to take his holding to 79%. The remaining 21% is held by other private investors.
Yu will, the company explained, make an initial HK$2.8 million (US$358,000) payment within 10 days of the Share and Rights Transfer Agreement being signed, another HK$12.6 million (US$1.6 million) by 20 December 2024 and the remaining balance by 30 June 2025.
Outlining the reasons for selling its Korean casino interest, New Silkroad said it had incurred losses in its entertainment business of HK$283 million, HK$12 million and HK$65 million in each of the past three financial years through 31 December 2023 and has opted to cut its losses to better allocate resources to other profitable segments. It noted that the transaction would result in a HK$37.2 million loss from the disposal based on the book value of the company’s investment into MegaLuck Company.
“As it is expected that the global economy will continue to remain slow and stagnant, affecting the tourism industry in Jeju Island, the Board does not consider that the prospects of [MegaLuck Company] would turn positive in the near future and considers it appropriate and is prepared to divest the Group’s business in South Korea,” the company explained.
New Silkroad’s other interests include development and operation of real estate in Australia, the production and distribution of wine in China and the provision of property management services in China.
