The HKD$1.91bn purchase price will be paid entirely through the issue of convertible bonds, with HKD$1.39bn to cover the resort’s gaming area and $HKD516m for the non-gaming area.
SJM said that the deal would “enable the group to fulfil the relevant requirements” for a new gaming concession when the current concessions expire on 31 December.
Currently, SJM leases the SJM property from SDTM, paying rent of HKD$80.6m in 2021, up from $HKD43.0m in 2020. However, as concessionaires are expected to transfer, “free of charge and free of any encumbrances or burdens”, any casinos and equipment at the end of the concession period, the business determined that SJM itself should own Oceanus so it can be transferred.
In addition to this factor, SJM said that the purchase “enables SJM Resorts to operate both gaming and non-gaming businesses within Oceanus in a synergised manner which are complementary to one another”.
“During the period pre-Covid when the borders were open with the mainland and Hong Kong, the group generated substantial free cash flow from Casino Oceanus and it was one of the best performing casinos of the Group during the years 2017 to 2019,” SJM added.
Original article: https://igamingbusiness.com/sjm-buys-oceanus-from-parent-sdtm-to-meet-requirements-to-extend-tender/
