Bloomberry Resorts Corp. said in a filing the Philippine Stock Exchange last week that it’s subsidiary Solaire Korea Co. Ltd is selling their 96.23 percent share in the company that owns Jeju Sun Hotel & Casino in Jeju Island. The filing revealed that Macau and Australasian junket operator Iao Kun Group Holding Co. (IKGH) will be the recipient of the property through subsidiary Iao Kun Jeju Hotel Company Limited.
“Iao Kun desires to enter into the Jeju market and is confident that it can attract its Chinese VIP customers to Jeju Island,” Bloomberry’s filing stated. In early 2015 Bloomberry acquired Jeju Sun for about US$54 million and invested another $15 million in upgrades, weathering a one month shutdown of the newly operating casino due to tax irregularities of the previous owner of the former “THE Las Vegas Casino”.
At current exchange rates, the deal, expected to close within 45 days, is worth about US$102 million or 117.5 billion Korean won.
Earlier this month Bloomberry stated in a Philippine Stock Exchange filing that, “The company confirms that selling the property in Jeju Island, South Korea is one of the options it is looking at,” however at that time there was no mention of a potential buyer and no papers had been signed.
Bloomberry’s first international venture never turned a profit and the subsidiary actually lost money on the property during the first quarter of 2016.
Iao Kun had been experiencing quarter after quarter of falling rolling chip count from its junket operations in Macau and started seeking diversification in international markets last year. Iao Kun still promotes for five VIP venues in Macau. In May 2015, the company announced that it had completed the purchase of all of the profit interests of Mr. Lou Kan Kuong (an officer of IKGH) for acting as a junket operator for the Crown Perth Casino in Perth, Australia and for the Crown Melbourne Casino Complex in Melbourne, Australia.
In a May 2015 filing with the HKEx the company stated, “Today marks an important step in beginning to diversify our sources of revenue and expanding our presence internationally,” said IKGH Chairman Lam. “We’re excited to begin bringing our VIP clients to Australia and remain committed to finding additional opportunities to further expand our presence overseas and ultimately generating long-term value for our shareholders.”
Asia Gaming Brief reported last week that a Union Gaming analyst notes that Iao Kun is not the first junket transitioning from agent to principal. “We believe other junkets are exploring similar acquisition opportunities and / or are looking to create their own greenfield opportunities overseas,” said the firm.
In a release to the press, Iao Kun chairman, Lam Man Pou said, “We are excited to be acquiring the Jeju Sun Hotel and Casino in Korea, our first lodging venture, which effectively broadens our strategic focus toward becoming a full-service hospitality company.
“We believe the acquisition will materially expand our footprint in Asia into the growing Korean market and increasingly popular island of Jeju while allowing us to further diversify and stabilize our revenue streams and cash flows. We expect the current Jeju Sun Hotel management team will remain to continue to run the newly renovated property, and we look forward to welcoming them to IKGH,” the chairman added.