Australian firm Frontier Capital Group Ltd. has dropped its lottery and possibly casino venture in Mongolia.
Frontier, in a filing to the Australian Securities Exchange on Tuesday, announced that it has terminated an agreement to operate the Mongolian National Lottery (MNL).
Frontier said it had received a notice from the vendor [Monvest Group Pte. Ltd.] saying that a number of conditions will not be satisfied within the period provided in the agreement. The deal would have given Frontier the right to establish the first casino in Mongolia, once the country allows it.
Frontier was acquiring the companies—BizNVIN LLC and Modern Capital Vest LLC, Mongolian subsidiaries of Monvest— which hold a special license to operate the MNL.
“The acquisition of the Mongolian National Lottery license would have complemented the recent move by the Company to Gaming and Hospitality.” said Frontier director Ram Navaratnam. “However, Frontier Capital has robust requirements that need to be met to minimize risks associated with acquisitions that the Company considers. In this instance those requirements have not been satisfied.”
The company announced its proposed acquisition of MNL in April 2015 and was to be completed in March 2016. They even appointed WSOP bracelet winner Johnny Chan to lead the proposed acquisition and investigate the Mongolian gaming opportunity.
The proposed casino legislation was submitted to the Mongolian parliament for review in early 2015 but is still under consideration.
For now, Frontier said that its board of directors will review the company’s investment portfolio in order to align it with the direction of gaming and hospitality. The termination will be effective upon receipt of AUD1.5 million from the vendor.
Frontier, in another filing earlier this month, said that it has completed the takeover of Hotel Stotsenberg and Casablanca Casino in the Clark Freeport Zone. The acquisition marked its entry into the gaming and hospitality industry.
The company is also pinning its growth expectations on the recently announced $1.5-billion passenger terminal expansion project at Clark International Airport, which is less than 2 kilometers from the hotel and casino. The company expects its profit to reach $11.7 million in 2018.
