Silver Heritage launches funding drive for Nepal casino

Silver Heritage launches funding drive for Nepal casino

Friday, June 30, 2017 Posted by James Walker
The group is looking to raise $14.4 million to fund the completion of Tiger Palace

Asia-focused casino operator Silver Heritage Group is seeking to raise additional funds from shareholders, after experiencing “unexpected delays and cost overruns” in relation to the development of Tiger Palace Resort Bhairahawa in Nepal.

Originally pegged to open earlier this year, the five-star resort is located 12km south of the Nepal-India border – a venture Silver Heritage said would enable it to capitalise on the “substantial Indian demand for gaming facilities”.

After flagging up “anticipated delays” in March, Sydney-listed Silver Heritage has now launched an entitlement offer, under which eligible shareholders will be entitled to subscribe for two additional Silver Heritage shares for each existing share held as of July 4, at an offer price of $0.05 per new share.

The company has revised the total costs of Tiger Palace to $51.8 million, up $11.8 million on the original budgeted costs. The first phase of South Asia’s first integrated resort is now planned for September 2017, and it is expected that the facility will be fully operational in November.

“The aggregate gross proceeds of the entitlement offer, expected to be approximately $14.4 million, will be used to fund completion of the construction and fit out of Tiger Palace, to provide working capital, and to pay the costs of the entitlement offer,” Silver Heritage said in filing to the Australian Securities Exchange today.

Incorporated in 2003, Silver Heritage Group was initially engaged in the supply and management of electronic gaming machines (EGMs) in Asia. Focus was placed on identifying opportunities arising from the growing popularity of gaming in markets where supply was limited due to government regulations and limited infrastructure.

Since then, the group has used its experience in rapidly developing Asian gaming markets to transition its business strategy to focus on the management and operation of casinos.

In addition to supplying EGMs to casinos and licensed gaming clubs in Laos and Cambodia, Silver Heritage operates The Millionaire’s Club and Casino in the Nepalese capital, Kathmandu, and provides management services to the Phoenix International Club casino in Bac Ninh, Vietnam

The soon-to-open Tiger Palace facility will be the group’s first wholly-owned and operated casino resort in Nepal. The luxury 14,000sq.m facility will include a 100-room five-star hotel with spa, gym, food and beverage facilities and function rooms, along with a 2,500sq.m casino featuring 52 tables and 200 EGMs.

Totally Gaming says: Project delays are certainly not a rarity in the casino business, but Silver Heritage’s call for additional funding puts a dampener on the group’s latest venture. However, the entitlement offer acts as a clear indication that the operator refuses to cut corners when it comes to the construction of the five-star facility, which lies at the gateway to one of the world’s largest untapped gaming markets. The focus now will be to push through to the final stage of development, and ensure Tiger Palace is not marred by any further setbacks.

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