Employees at Silver Heritage are more than likely getting a little nervous. The casino operator that controls several venues in Nepal reported earlier this week that its financial health was on the decline, and that it would need to enter administration in order to avoid a full-out catastrophe. “Administration” is a fancy way of saying “bankruptcy avoidance,” and the line between a legitimate restructuring and a dissolution of a company is extremely thin once a company announces it’s gone into administration. Still, Silver Heritage is working hard to keep that line from snapping, and its primary lender has now brought in a couple of heavyweights to help.
The Australian Securities Exchange-listed company announced (in pdf) that OCP Asia has appointed KPMG as administrators to assist and possibly reverse the continued slide experienced by Silver Heritage. The company owns the Tiger Palace Resort in Nepal, as well as a few other gambling venues in the country, and it calls the current situation serious, adding that the company is “likely to become insolvent.” OCP Asia hopes it can keep that from happening, since it implies a substantial hit to its own bottom line. KPMG’s Ryan Eagle and Amanda Coneyworth will be taking the lead as “Voluntary Administrators.”
KPMG will be joined (in pdf) by two business experts from the business advisory firm FTI Consulting. John Park and Joseph Hansell will act as receivers and managers of the gambling operator, and OCP will also “provide additional funding to the receivers while they undertake an urgent financial assessment of the assets under their control.” OCP Asia had given Silver Heritage $1 million at the beginning of the year, and its refusal to offer more financial support was a catalyst for the possible bankruptcy. With no money coming from other sources, the backer was essentially forced to cover the expenses of administration of it hopes to keep the business afloat.
The receivers are expected to work “closely with all relevant stakeholders to determine the best course of action and to ensure the continuation of the underlying business while strategic options are being explored,” according to Silver Heritage. It adds, “The receivers will work with the administrators and the company to sustain business operations whilst evaluating strategic options, including a sale of all or part of the business, to ultimately maximize the value of the company’s assets for its stakeholders.”
It has been a rough couple of years for Silver Heritage and it has already tried a couple of times to get rid of its assets in Nepal. Teetering on the edge of bankruptcy is a solid argument for finding some way to secure a sale, even if it means not being able to turn over the assets for the amount of money that it hopes to collect.