LUSTER (5068) - Luster to venture into Cambodian gaming business
April 30, 2015 : 9:03 PM MYT
KUALA LUMPUR (Apr 30): High precision plastic parts maker Luster Industries Bhd is venturing into the Cambodian lottery business by acquiring a stake in Pan Cambodian Lottery Corp Ltd (PCLCL) – a licensed number forecast operator (NFO) in Cambodia.
In a filing with Bursa Malaysia today, Luster (fundamental: 0.5; valuation: 2.25) said it has signed a sale of shares agreement (SSA) with Hong Kong-based Opal Deluxe Ltd to acquire 600 shares for US$4.2 million (RM14.97 million) cash, for a 60% stake in PCLCL.
The purchase consideration for the proposed acquisition comes with a net profit guarantee of US$3 million across the next three financial years of 2015, 2016 and 2017.
Luster said it will fund the proposed acquisition through internal funds and/or bank borrowings.
It added that the proposed acquisition is in line with its strategic plans to diversify into other viable investment opportunities to enhance its profitability in the longer term horizon and reduce its dependence on its existing core business of manufacturing including plastic and electrical and electronic industries.
Upon completion of the proposed acquisition, which is expected to be by mid-2015, PCLCL will become a subsidiary of Luster.
Opal Deluxe is a wholly-owned subsidiary of Fragrant Prosperity Plc, a gaming, tourism and property development group listed on London’s GXG Markets.
At the signing ceremony today, Luster deputy managing director Liang Wooi Gee said the US$4.2 million purchase consideration is not finalised yet, as it is subject to changes resulting from a valuation study which is expected to be completed in three weeks.
He also said the group plans to spend some RM100 million in capital expenditure for the next three years to expand PCLCL.
Liang revealed that PCLCL not only owns the licence to operate lottery business, but also casino and online casino.
“Moving forward, we hope to grow this business bigger, to not only involve lottery but also casino business,” Liang told reporters after the signing ceremony between Luster and Opal Deluxe here today.
“We intend to not only operate casinos, but to run an integrated resort like Genting Group, which consists of hotel and shopping components. This will be very exciting and thus, the location of the land is very important to us,” he added.
Already, the group has been looking out for land to acquire at the borders of Cambodia, Thailand and Vietnam.
“The Cambodian government’s policies are very receptive to gaming operations, which is also the reason why we had decided to venture there,” he said.
According to Liang, PCLCL also enjoy low tax rate in Cambodia, whereby it only requires to pay 10% gaming tax, without any corporate tax involves.
Nevertheless, he said the immediate business strategy is to expand the existing lottery businesses beyond Phnom Penh.
Currently, PCLCL operates 10 outlets in Phnom Penh.
“We have been in talks with the local petrol kiosks and convenience stores (in Cambodia) in the hope to sell our lottery tickets there,” Liang said.
Luster shares closed half sen or 4.55% higher at 11.5 sen today, with 25.17 million shares traded. The counter was one of the top 10 most traded stocks today. The group has a market capitalisation of RM173.19 million.
http://www.theedgemarkets.com
April 30, 2015 : 9:03 PM MYT
KUALA LUMPUR (Apr 30): High precision plastic parts maker Luster Industries Bhd is venturing into the Cambodian lottery business by acquiring a stake in Pan Cambodian Lottery Corp Ltd (PCLCL) – a licensed number forecast operator (NFO) in Cambodia.
In a filing with Bursa Malaysia today, Luster (fundamental: 0.5; valuation: 2.25) said it has signed a sale of shares agreement (SSA) with Hong Kong-based Opal Deluxe Ltd to acquire 600 shares for US$4.2 million (RM14.97 million) cash, for a 60% stake in PCLCL.
The purchase consideration for the proposed acquisition comes with a net profit guarantee of US$3 million across the next three financial years of 2015, 2016 and 2017.
Luster said it will fund the proposed acquisition through internal funds and/or bank borrowings.
It added that the proposed acquisition is in line with its strategic plans to diversify into other viable investment opportunities to enhance its profitability in the longer term horizon and reduce its dependence on its existing core business of manufacturing including plastic and electrical and electronic industries.
Upon completion of the proposed acquisition, which is expected to be by mid-2015, PCLCL will become a subsidiary of Luster.
Opal Deluxe is a wholly-owned subsidiary of Fragrant Prosperity Plc, a gaming, tourism and property development group listed on London’s GXG Markets.
At the signing ceremony today, Luster deputy managing director Liang Wooi Gee said the US$4.2 million purchase consideration is not finalised yet, as it is subject to changes resulting from a valuation study which is expected to be completed in three weeks.
He also said the group plans to spend some RM100 million in capital expenditure for the next three years to expand PCLCL.
Liang revealed that PCLCL not only owns the licence to operate lottery business, but also casino and online casino.
“Moving forward, we hope to grow this business bigger, to not only involve lottery but also casino business,” Liang told reporters after the signing ceremony between Luster and Opal Deluxe here today.
“We intend to not only operate casinos, but to run an integrated resort like Genting Group, which consists of hotel and shopping components. This will be very exciting and thus, the location of the land is very important to us,” he added.
Already, the group has been looking out for land to acquire at the borders of Cambodia, Thailand and Vietnam.
“The Cambodian government’s policies are very receptive to gaming operations, which is also the reason why we had decided to venture there,” he said.
According to Liang, PCLCL also enjoy low tax rate in Cambodia, whereby it only requires to pay 10% gaming tax, without any corporate tax involves.
Nevertheless, he said the immediate business strategy is to expand the existing lottery businesses beyond Phnom Penh.
Currently, PCLCL operates 10 outlets in Phnom Penh.
“We have been in talks with the local petrol kiosks and convenience stores (in Cambodia) in the hope to sell our lottery tickets there,” Liang said.
Luster shares closed half sen or 4.55% higher at 11.5 sen today, with 25.17 million shares traded. The counter was one of the top 10 most traded stocks today. The group has a market capitalisation of RM173.19 million.
http://www.theedgemarkets.com
