Hong Kong-listed Summit Ascent Holdings says its Manila casino development will provide a “fast pass” into the lucrative Philippines market amid ongoing uncertainty around the future of its Russian integrated resort, Tigre de Cristal.
In the company’s 2021 Annual Report, published Monday, Summit Ascent said it is transforming itself into a “pan-Asian gaming operator” after subscribing to Php5.6 billion of convertible bonds in Philippines-listed Suntrust Home Developers Inc in 2020 and another Php6.4 billion in 2021. Suntrust is currently developing a US$1 billion casino and hotel within the Westside City resort complex, located in Manila’s Entertainment City precinct.
Both Summit Ascent and Suntrust are majority-owned by Suncity Group Holdings, which also holds a stake in Hoiana in central Vietnam.
While Summit Ascent has traditionally counted Tigre de Cristal as its core asset, the company said Monday that the convertible bonds issued by Suntrust “offer flexibility for the Group to have an upside exposure in the Philippines should the Main Hotel Casino become successful, while allowing the Group to earn an interest income immediately.
“Even with the COVID-19 pandemic as a backdrop, the other four integrated resorts in Manila of the Philippines delivered solid gaming revenue in 2021 according to [PAGCOR].
“When the Main Hotel Casino is completed, it will become the latest attraction undoubtedly. The potential for the Group to own part of an integrated resort in a location with a decade’s track record of double-digit gaming revenue growth, offers the Group an alternative fast pass to tap into the pan-Asian gaming market.”
Exposure to the Philippines market comes as COVID-19 and Russia’s war on Ukraine create dual headwinds for Tigre de Cristal, with Summit Ascent having already announced that it will postpone work on the property’s Phase II development until there is further clarity.
As a result, Summit Ascent said in its Annual Report that there is “no imminent need for the Group to transfer funds into the Russian Federation” to support Phase II while existing operations will continue to be supported by the contribution of locals.
“Despite recent geopolitical tensions, the economic sanctions on the Russian Federation do not have an immediate impact on our operations,” the company said.
“While it may be too early to thoroughly evaluate all possible effects, Tigre de Cristal operating in the Russian Far East has been self-sufficient based on an all-local contribution. The Group maintains a healthy balance sheet, all equity financed without any bank borrowings.
“The Group now turns prudent towards the future expansion of Tigre de Cristal as the foreign direct investment environment is shifting. TdC Phase II is currently aiming for an opening no earlier than 2025 and sub-phases will be rolled out gradually in response to the continual negative impact of the COVID-19 pandemic.”
As previously reported by Inside Asian Gaming, Summit Ascent reported a loss attributable to owners of the company of HK$230 million (US$29 million) in 2021.