Macau casino tycoon Stanley Ho Hung-sun is poised to buy up to a 10 percent stake in Star Cruises (0678), which will then get the rights to build and operate a casino in Macau in exchange, according to a report.
Shares in Star Cruises have been suspended from trading since January 12, pending an announcement in relation to a price-sensitive potential transaction, according to a statement filed with the stock exchange.
The cruise operator said it will make an announcement in due course.
Singapore’s Straits Times reported Tuesday, quoting unidentified financial executives close to the deal, that Ho will be invited to buy up to 10 percent of Star Cruises, a cruise and gaming company controlled by Malaysia’s Genting Group which has a stake in a casino resort project on Sentosa Island in Singapore, the second casino in the city.
The deal is part of the plan to raise funds after Star Cruises and Genting International won the right to develop the USD 3.4 billion (HKD 26.53 billion) casino resort on Sentosa Island.
Details for the deal have yet to be finalized, but the deal is expected to be announced this week, the paper said.
Analysts believe the deal is positive for Star Cruises as it could help relieve the financial burden of the highly-geared company. Meanwhile, Ho will then be allowed to take a stake in Singapore’s gaming market, enabling him to diversify outside Macau.
It is reported that the market share of Ho’s Sociedade de Jogos de Macau (SJM), in terms of gaming revenue in Macau, fell to 51 percent by the end of 2006 from 75 percent a year ago.
Melco International (0200) which is controlled by Ho’s son, Lawrence Ho Yau-lung, was among the final bidders for the Sentosa project, but lost its bid to the conglomerate formed by Star Cruises and Genting International.
For the first nine months of 2006, Star Cruises, the world’s third-largest cruise operator, reported a net loss of USD 8.63 million, compared with a net profit of USD 43.6 million a year earlier.