By Ben Blaschke
Silver Heritage Group Limited has announced the launch of a fully underwritten accelerated renounceable entitlement offer which is expected to raise around US$14.4 million (AU$19 million) to fund the completion of Tiger Palace casino resort in Nepal.
The entitlement offer, lead-managed by Baillieu Holst Ltd, is a 2:1 accelerated renounceable entitlement offer of ordinary shares in the company to eligible shareholders at an offer price of AU$0.05 per new share. The US$14.4 million will specifically fund completion of the construction and fit out of Tiger Palace, provide working capital and pay the costs of the entitlement offer.
The Company has also agreed to grant 29,904,306 new options to the bondholders with an exercise price of AU$0.11.
Silver Heritage said it has determined a final revised budget for the completion of Tiger Palace of US$51.8 million, an increase of US$11.8 million from the original budgeted cost. The revised timeline will see a phased opening in September 2017 for the hotel and hospitality areas and in November 2017 for the entire resort, including casino operations.
In conjunction with the entitlement offer, the company said it has agreed certain amendments to its senior secured bond facility including revision of the financial covenants under the bonds as well as inclusion of the following mandatory amortisation:
– US$2,000,000 to be repaid on or before 31 December 2018
– US$3,000,000 to be repaid on or before 31 March 2019
– US$4,000,000 to be repaid on or before 30 June 2019.
The company’s voluntary temporary suspension from quotation will be lifted on Tuesday 4 July 2017 and trading will recommence the same day on an “ex-entitlements” basis.
Silver Heritage Managing Director and CEO Mike Bolsover said, “According to a recent Brookings Institution working paper, the vast majority – almost 90 percent – of the next billion entrants into the global middle class will be in Asia, including 380 million Indians.
“The Indian middle-class market is growing fast and having probably overtaken Japan in 2016, by 2022 India could also overtake the US and become the second-largest middle-class market in the world.
“I believe with high conviction that we are in the right place geographically to address this rapidly growing market, that we are proven operators of casinos in emerging jurisdictions including here in Nepal, and whilst we have had a challenging period developing the subcontinent’s first Integrated Resort we have learned from our experience and have an excellent team in place now to execute the final stages of the build and pre-opening through to operations.
“We still have some work to do but these are indeed exciting times for the company and our shareholders and we look forward to the opening of the hotel in September and the casino operations in November of this year at Tiger Palace Resort.”
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