In the middle of August, gaming services company Success Dragon announced that it would be using shares placements in order to collect some spending money. In a filing with the Hong Kong Stock Exchange last Tuesday, it confirmed that the shares placement had completed and that it was a relative success.
Success Dragon had hoped to raise as much as $12.4 million from the placement, but was only able to collect around $8.8 million. The money it collected from the shares placement will be used, in part, to fund business development. Another portion, $2.72 million, will be dedicated to the repayment of loans and other payables and whatever is left will be earmarked for working capital.
According to the filing, Success Dragon asserted that the investors who took part in the placement were all third-party investors. It added that, as far as it knows, none was an active investor with a substantial stake in the company.
With the shares placement complete, those investors now own 12.37% of the company’s stock. The amount of stock owned by the largest shareholder, Liu Shiwei, was also reduced as a result. Liu’s stake is now around 25.88% to 29.53%. A non-executive director, Yong Peng Tak, saw his share decrease from 0.03% to 0.04%. Previously, the publicly owned portion of the stock was 70.43%. Following the placement, that amount has dropped to 61.72%.
The bulk of the income to Success Dragon, around 95%, comes from slot machine management in the Macau market. However, a decrease in activity saw the company lose about $16.65 million in the most recent fiscal year. It settled on the stock placement deal after reporting that it only had $152,000 remaining in cash and cash reserves.
Success Dragon has been in a rut lately and has suffered from continuous losses. In the previous fiscal year, the company reported losses of $19.89 million. Apart from the losses reported for the most recent fiscal year, it also announced an impairment loss in June from an investment it made in a power and storage company in California in 2017. That resulted in an additional $2.5 million loss.