Hong Kong-listed Summit Ascent Holdings Ltd is providing a loan of US$120 million to Philippine-based Suntrust Home Developers Inc, to support the latter’s development of a casino scheme in the Philippine capital Manila.
Suntrust is controlled – via a 51-percent stake – by Hong Kong-listed Suncity Group Holdings Ltd. The latter is a firm led by Alvin Chau Cheok Wa, who also leads privately-held Macau casino junket brand Suncity Group. Suncity Group Holdings is additionally the controlling shareholder of Summit Ascent, with a total stake of 69.66 percent in that company
In a filing to the Hong Kong Stock Exchange on Tuesday, Summit Ascent said that “the continual impact of Covid-19” had affected “the progress of the pre-construction phase” of the second phase of the firm’s Tigre de Cristal casino complex in Russia. That “included design, procurement of construction materials, tendering and associated payments.”
Summit Ascent stated that because of these delays, part of the net proceeds from a October 2020 rights issue – to the extent of US$60 million – originally intended for use in the second phase development of Tigre de Cristal, was “not required for immediate use by the group for the moment.”
Summit Ascent added: “Having considered the commercial benefits to the group in deploying the original portion for Tigre de Cristal as loan and generating interest income to the group for the moment, the board is of the view that the proposed change in use of the original portion for Tigre de Cristal as loan is fair and reasonable and in the interests of the company and the shareholders as a whole.”
The loan involves the payment by Suntrust to Summit Ascent of a 6-percent annual interest rate. The agreement sets a default annual interest rate of 8 percent. The maturity date of the loan is put at three months from the date of the disbursement to SunTrust; the agreement however includes provisions for potential extensions.
Summit Ascent stated that the loan would provide “part of the necessary funding” required by SunTrust for the construction and development of its Manila hotel casino scheme.
Suntrust is developing the “main hotel casino” at the Westside City Project (pictured in an artist’s rendering), located in Manila’s Entertainment City. According to information provided eatlier this month by Suncity Group Holdings, the project has a price tag of approximately US$1 billion, and should “commence operation” in 2023.
The loan agreement still needs to be approved by a shareholder special general meeting of Summit Ascent, the company said.