Sun City Group Holdings Limited, through its subsidiary SGMC (Sihanoukville), has outlined the assistance it will provide in the building of Golden Sun Sky Entertainment Co., Ltd.’s integrated resort (IR) in Sihanoukville Province, Cambodia.
In a filing at the Hong Kong Stock Exchange, Suncity said it had agreed to take on pre-opening operations and provide “technical services” in the design of the 120,000 square-meter casino, which is part of the 550,000 square-meter resort, scheduled to open on March 31, 2020.
“The Directors believe that the entering into of the Technical Services Agreement and Casino Management Agreement will allow the Group to expand its customer base to Cambodia and at the same time enable the Group to leverage on the Boards’ expertise in the gaming market,” Suncity’s announcement read.
The partnership grants SGMC Sihanoukville, “from the Anticipated Opening Date the exclusive right, authority and discretion during the Operating Term and any extended term,” to carry out its services.
Among the pre-opening services enumerated are: establishing rates for gaming and other facilities, including food and beverages served in the casino; employment and payment of personnel for casino operations; management of revenue from operations, including the issuance of invoices and collecting of fees; and budget preparation. For this, SGMC Sihanoukville will receive 3% of the casino’s monthly gross gaming revenue (GGR), and an annual fee of either 5% or 6% of gaming earnings before interest, depreciation and amortization (EBITDA), depending on the casino’s performance.
For the technical services, SGMC Sihanoukville will receive a total of $500,000. In case its services are still required a year after the agreement, a monthly fee of $41,667 will be paid.
The new contracts supplement an earlier agreement in which Suncity said it would provide “certain consultancy services” to Golden Sun Sky, “the actual scope of services… subject to the entering into of specific contract(s).”
Suncity reported a $241-million loss for the first half of 2018, 160% higher than last year’s loss for the same period. Its revenue for January to June 2018 was $63 million, 28% higher than the previous year’s first half. Of this amount, $1.24 million came from its hotel and IR consultancy services.