Hong Kong-based LET Group Holdings recently finalized the sale of the licensee of its Tigre De Cristal Resort in Vladivostok for a hefty $116 million. The sale was expedited due to uncertainties stemming from the ongoing conflict between Ukraine and Russia.
However, the decision to sell the licensee did not sit well with the company’s independent non-executive directors, all of whom resigned in protest of the agreement. The disagreement led to their formal departure from the firm, indicating the gravity of their disapproval.
The sale involves Oriental Regent Ltd., a subsidiary of LET Group, relinquishing its entire ownership of G1 Entertainment LLC, which holds the gaming license for Tigre de Cristal, to the Russian entity Dalnevostochniy Aktiv LLC. The $116 million transaction will be conducted in Chinese yuan and outside of Russia, in light of the sanctions imposed on the country. Additionally, Oriental Regent committed to returning the firm’s $28 million investment, effectively reducing its exposure to the Russian market to zero.
The investment holding firm and its affiliate, Summit Ascent Holdings Ltd., justified the sale by citing the uncertainties arising from the Russia-Ukraine conflict and the related sanctions on Russia, causing adverse effects on the operations and prospects of G1 Entertainment. Despite the departure of the non-executive directors, Chairman Andrew Lo Kai Bong remained at the helm of both companies.
Furthermore, the substantial investment is expected to benefit stakeholders such as Firich Enterprises Co Ltd., which holds a 20 percent share in Oriental Regent. The company anticipates receiving $28 million in cash from the sale, which could greatly offset the losses incurred in 2023. Similarly, Summit Ascent, with a 77.5 percent share in Oriental Regent, stands to benefit significantly from the $116 million sale.
The board’s supervision of the sales agreement is vital for ensuring transparency and accountability, especially in light of the directors’ resignation. It remains to be seen how the sale will impact the operations and future prospects of the parties involved.