On March 1, the Phoenix International Club near Hanoi, Vietnam, was shut down after its operator wasn’t able to keep its license active. Now, Silver Heritage Group, a gaming operator with venues scattered throughout Asia, is going to receive a nice payout from the Phoenix venue. The company is expected to receive $5.25 million due to the casino’s closure.
According to a filing with the Australian Securities Exchange (ASX) from Tuesday, “As a result of breaches by the owner of Phoenix of the entertainment services agreement [signed with Silver Heritage], primarily the requirement to maintain the gaming licence that allows the operation of gaming activities at Phoenix, [Silver Heritage] has negotiated a settlement agreement with the owner of Phoenix, whereby, inter alia, the company will be paid the sum of US$5.25 million in compensation in full and final settlement of all claims and rights either party may have in relation to the entertainment services agreement.”
It added that the money reflected what would have been earnings over a two-year period that Silver Heritage would have earned if the venue was still operational.
Silver Heritage stated, “The company is of the view that the terms of the settlement, including the termination of the entertainment services agreement, are generally favourable having regard to all circumstances, including but not limited to the recent underperformance of Phoenix, the breaches of the entertainment services agreement by the owner of Phoenix, the uncertainty in relation to the ability for the investment certificate issued to Phoenix to be amended to re-allow by law the operation of table games on the premises, and the recent closure by the owner of Phoenix of its casino on March 1.”
The million-dollar payout will certainly be welcome, but it won’t go far enough to put the company in the black. In the filing, Silver Heritage indicated that it still expects to record a loss of about $1.2 million as a result of the Phoenix disposal. The loss includes “the remaining unamortised value of the entertainment services agreement in the company’s books (US$5.0 million), the net book value of the assets transferred (US$1.0 million) and shutdown costs (US$0.5 million).”