Suncity Group Holdings, an entity controlled by the CEO of Suncity Group, has maintained a 34% stake in the Hoiana casino resort in Vietnam since August 2018. The resort is still under development and the first phase is expected to launch sometime this year after missing an expected October 2019 date. To help it cross the finish line, a unit of Suncity Group Holdings is handing over $17 million in the form of a loan, part of a larger $34-million loan plan that will help the resort add its final touches and be a major part of the Vietnamese gambling landscape.
According to a company filing with the Hong Kong Stock Exchange from yesterday, the loan is going to be provided through a scheme involving several different entities. Star Admiral Ltd, a wholly-owned subsidiary established in the British Virgin Islands (BVI), will give the $17 million to Gold Yield Enterprises, Ltd. (GYE), the resort’s developer, which is also registered in the BVI. Gold Yield’s ownership is split down the middle between Star Admiral and Alpha Era Investments, yet another BVI company that is listed as an “independent third party.”
The filing explains, “In light of the increasing demand for tourism-related business in the Southeast Asia region, the board holds a positive outlook for the project in the future and it is expected that the group will benefit from the future success of Gold Yield Enterprises.”
The final expense to complete the resort is going to run around $4 billion, provided things stay on track. Suncity added, “Upon the successful implementation of the project in Vietnam, it is expected that there are business prospects and also room for business growth for GYE.”
GYE is expected to pay an interest rate that certainly won’t break the bank. The loan agreement stipulates an annual rate of just 1.5%, with the entire principal amount and interest due by the end of the loan agreement’s five-year term.
Since the Hoiana resort was first conceived, Suncity has bankrolled a substantial portion of the development, although it hasn’t financed the majority of the construction. The company has already provided a loan of almost $65 million to GYE, making it a lucrative investment on several fronts. In addition to revenue generated from the loan and the possibility for earnings from operations, Suncity is also going to manage the casino operations through an exclusive agreement signed in May of last year.