Hong Kong-listed property developer Far East Consortium International Ltd. (FEC) is looking beyond China’s horizons in search of new revenue streams.
In a disclosure to the Hong Kong Stock Exchange, FEC announced that the company has entered an agreement with Nevada-incorporated firm Trans World Corp. (TWC) for a possible acquisition or merger.
TWC owns five hotels in Germany, Austria, and the Czech Republic, and three full-service casinos in the Czech Republic under the registered brand American Chance Casinos. The Czech casinos feature gaming tables and slot machines that FEC hopes will bring strong recurring cash flow.
Chris Hoong, managing director of FEC, said the company’s interest in acquiring or merging with TWC was piqued by the recent regulatory changes in Czech Republic, which would “provide the group with further development opportunities.”
“The transaction will allow the group to establish a gaming platform and will add an additional stream of steady recurring cash flow to [FEC],” Hoong said in a statement.
In a nutshell, FEC agreed to pay up to HKD327.6 million (US$42 million) and will assume TWC’s net debt of HKD86 million ($11 million) for the acquisition. The agreement also made it clear that FEC will merge with TWC, with the latter continuing as the surviving company and becoming a wholly owned subsidiary of FEC OIL.
FEC’s business revolves around property development and investment, hotel operation and management, as well as car park and facilities management.
The firm, which has been listed in the Hong Kong Stock Exchange since 1972, has adopted a diversified regional strategy, with business covering Hong Kong, mainland China, Australia, Malaysia, Singapore, Europe, and New Zealand.
FEC is one of the investors of an integrated resort in Queensland, Australia, which is operated by Australian casino operator The Star Entertainment Group. In October 2017, state regulators awarded The Star with a casino license for Queen’s Wharf Brisbane.