Macau casino junket investor Iao Kun Group Holding Company (IKGH) is set to test the technology sector with its major acquisition of a Chinese-tech firm.
The move comes as IKGH attempt to staunch the financial bleeding as a result of bad VIP debts. Shifting its strategy from the junket to technological industry may provide additional support to the company that has been crippled by financial tailspin.
In a press release, IKGH announced it is acquiring 51 percent of software technology development company Jia-Heng Industrial Ltd, the holding company of Guangzhou LiNiu Network Technology Co Ltd.
IKGH said that LiNiu Network is currently internally testing its new electronic trading platform, which is scheduled to launch before the end of H1 2017.
Through the platform, the LiNiu Network will cover production and service businesses linked to the agricultural sector, including production, sideline products, ecotourism, finance and market information, said Iao Kun. LiNiu Network expects to generate revenue through commissions, advertising and guarantee deposits.
“Over the last few months, we have conducted an extensive review of our operations and our business strategy in order to right-size Iao Kun and find a path where we believe we can create long-term value for our shareholders,” IKGH chairman Lam Man Pou said.
As part of its plans to diversify further from non-gaming assets, Lam pointed out that the company has identified several opportunities which he believed were “attractive from a value-add standpoint”.
“After appropriate due diligence, we made the determination to acquire a majority interest in LiNiu Network and will be focusing our near- to mid-term efforts on successfully launching its trading platform and rapidly scaling the business,” Iao Kun’s chairman stated.
Lam, however, clarified that IKGH will not completely exit the junket sector, assuring that it will continue to promote its single VIP room in Macau, located at City of Dreams Macau.
“After recently completing the review, we concluded that we did not see a path forward toward rebuilding our VIP gaming portfolio. While we will continue to participate in the promotion of our VIP gaming room in Macau, we have no further plans to expand our gaming operations to additional VIP rooms,” he said.
