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.
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.