Australian-listed gaming operator Silver Heritage Group will receive $5.25 million in compensation from its former business partner in Vietnam after suspending all casinos at Phoenix International Club (pictured) near Hanoi on March 1.
“As a result of Phoenix’s owner of an entertainment services agreement [agreed with Silver Heritage] violating requirements to maintain a gaming license [agreed with Silver Heritage], [Silver Heritage] has negotiated a settlement agreement with Phoenix’s owner, which will result in the Company receiving US$5.25 million in compensation through a complete and final settlement of all claims and rights the parties may have in connection with the entertainment services agreement,” Silver Heritage said in a filing on Tuesday.
The compensation amount reflected Phoenix’s estimated earnings for about two years before interest, taxation, depreciation and amortization, the company said.
Despite the compensation, the game operator expects to post a loss of approximately $1.2 million following the disposal of its Phoenix operations, the filing stated. These included “the uncompensated value of the entertainment services agreement remaining in the Company’s books (US$500,000), the net book value of the transferred assets (US$1 million) and the closing cost (US$500,000).”
Silver Heritage said the settlement “provides the termination of the entertainment services agreement effective March 1, 2019, and the transfer of gaming assets from the Phoenix-based company to Phoenix owners.”
Silver Heritage said the $5.25 million compensation will be paid over two installment payments on March 12 and April 11.
“We take the view that the terms of the agreement, including termination of the entertainment services agreement, are generally favorable for all situations, including Phoenix’s recent underperformance, Phoenix’s owner’s breach of entertainment services agreements, uncertainty related to the ability of investment certificates issued to Phoenix to be reauthorized by law, and the recent closure of Phoenix’s casino owner on March 1,” Silver Heritage said.
When the closure of Phoenix was first announced on March 1, Silver Heritage said it was “for an indefinite period.”
Phoenix’s casino operations accounted for about 45% of Silver Heritage’s unaudited sales in 2018, according to the company. But in late January, the company noted that Phoenix’s casino operations revenue was “below budget expectations.”
BY: 파친코