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Lawrence Ho, son of Macau casino mogul Stanley Ho, is investing in two Russian gambling resorts worth $630 million as he expands his businesses overseas.
Melco International Development Ltd. and Summit Ascent Holdings Ltd., both backed by Ho, will buy a combined 51 percent stake in a holding company that will develop the two casino hotels in the Primorye Region near China’s border, according to the companies’ filings to the Hong Kong’s stock exchange yesterday
“It’s a rather small investment for Lawrence, compared with other projects he has in Macau,” Jeremy Tan, a Hong Kong- based analyst at Kim Eng Securities Ltd., said by phone today. “It enables Lawrence and his companies to have a first-mover advantage tapping into the Northern Chinese and Russian markets.”
Lawrence Ho is expanding his gambling business overseas and in Macau, the world’s largest casino hub. Melco Crown Entertainment Ltd., his venture with James Packer, is joining Philippine billionaire Henry Sy’s Belle Corp. to build a casino resort in Manila. He is also developing a new resort on Macau’s Cotai strip to compete with larger rivals.
Summit Ascent, whose shares were suspended on June 10, resumed trading in Hong Kong today, soared 23 percent to close at HK$4.27, the highest close since its listing in January 1994. Melco International, a holding company for Melco Crown, rose 9 percent to close at HK$14.48. The benchmark Hang Seng Index gained 2.5 percent.
The projects are in the Primorye region on the Pacific coast. Primorye’s capital, Vladivostok, is a two and a half hour flight from Beijing.
The casinos will be built in a tourism zone that also includes hotels, shops, an amusement park and a golf course. Mainland tourists helped push Macau’s casino revenue to $38 billion last year.
Melco International will pay $980,392 for 5 percent of Oriental Regent Ltd. while Summit Ascent will pay $9.02 million for 46 percent of the same company whose unit has a gaming license in the Primorye Region.
Both companies will also contribute money toward the estimated $130 million cost of the project, based on their percentage holdings, they said. Their partner in Oriental Regent is Elegant City Group Ltd., a company owned by Oleg Drozdov, a Russian businessman, Melco said.
Oriental is developing a resort scheduled to open in September 2014 with a 119-room hotel and a casino with 800 slot machines, 25 VIP gambling tables and 40 mass-market tables, Melco and Summit Ascent said.
Separately, Summit Ascent also signed a preliminary agreement for a joint venture that will develop another casino resort in the same area. That casino requires a total investment of about $500 million, it said.
The venture’s resort complex will have a four-star hotel with about 300 rooms, a five-star hotel with about 200 rooms, casino with about 500 slot machines, 100 VIP gambling tables and 70 mass-market tables.
Ho was appointed chairman of Summit Ascent, the company said yesterday.
Editors: Stephanie Wong and Anjali Cordeiro.
To contact the reporters on this story: Joshua Fellman in New York at email@example.com; Vinicy Chan in Hong Kong at firstname.lastname@example.org. To contact the editor responsible for this story: Stephanie Wong at email@example.com.