Bloomberry denies Iao Kun’s claims of extending Jeju Sun deal deadline

Bloomberry denies Iao Kun's claims of extending Jeju Sun deal deadline

Philippines-based casino operator Bloomberry Resorts has publicly refuted a junket operator’s claim that it had been given more time to close the purchase of Bloomberry’s South Korean casino business.

Bloomberry denies Iao Kun's claims of extending Jeju Sun deal deadlineOn June 23, Bloomberry announced that it had reached a deal to sell its Jeju Sun Hotel & Casino to Macau junket investor Iao Kun Group Holding Company (IKGH). The deal was expected to close within 45 days of the announcement.

Last week, during an analyst call to discuss IKGH’s grim Q2 results, IKGH director Jim Preissler claimed his company was having trouble arranging financing for the $102.6m deal, but reassured investors that Bloomberry had agreed to extend the 45-day deadline to allow IKGH more time to raise the readies.

On Monday, Bloomberry filed a terse notice with the Philippine Stock Exchange, titled ‘Clarification of News Reports.’ The notice referenced Preissler’s comments, then stated unequivocally that Bloomberry “has not agreed to the extension of the closing date for the said transaction with Iao Kun.”

IKGH has yet to publicly respond to Bloomberry’s statement but this is the second time this month that IKGH’s public pronouncements have been refuted by other parties to the transactions.

Earlier this month, IKGH announced that it was closing two VIP gaming rooms at Galaxy Entertainment Group (GEG) casinos in Macau as part of the ongoing strategic review of its business. A few days later, GEG said IKGH hadn’t elected to close the rooms but had been given the boot by GEG for unspecified “breach of the agreements made with us.” GEG went on to say that it intended to “vigorously” pursue legal action against IKGH and its directors.

IKGH has suffered far worse than public shaming in 2016. Macau’s much publicized gaming revenue slowdown has hit the company hard, extending its VIP turnover losing streak to 23 straight months in August. The company’s Macau presence has since shrunk from five VIP rooms to just two.

The Jeju Sun casino was part of IKGH’s efforts to lessen its dependence on the Macau market. Similarly, IKGH inked a junket deal with Australian casino operator Crown Resorts in 2015 but Preissler revealed last week that this business was presently “not a meaningful contributor” to IKGH’s revenue and Preissler didn’t expect that to change “in the foreseeable future.”

IKGH is also facing the delisting of its shares from the NASDAQ exchange unless it can lift its sagging share price back up over the $1.00 minimum required by the exchange.