HONG KONG--(BUSINESS WIRE)--
Asia Entertainment & Resources Ltd. (“AERL”) (AERL), which operates through its subsidiaries and related promoter companies that act as VIP room gaming promoters, today announced that it has entered into a non-binding memorandum of understanding, whereby it will acquire all of the outstanding interests and operations of the VIP gaming room at Level 1 of Le Royal Arc Casino located in NAPE, Downtown Macau, promoted and operated by Mr. Wong Wing Yim (the “Seller”). The Seller promotes and operates the VIP gaming room which has six tables and is served by at least 500 agents. The VIP gaming room is operated under the Sociedade de Jogos de Macau S.A.’s concession. Subject to due diligence and customary closing conditions, AERL expects to close the transaction by June 30, 2013.
The purchase price to be paid by AERL to the Seller shall be equal to US$20 million in cash, US$10 million of which will be paid upon the closing of the acquisition and the remaining US$10 million to be paid upon the renewal or extension of the existing collaborator agreements to promote the VIP gaming room through at least December 31, 2014.
Additionally, if the Seller and his network of agents achieve a Rolling Chip Turnover of at least US$2.5 billion in each of the twelve-month periods ending June 30, 2014, 2015 and 2016, the Seller would receive three additional purchase consideration installments of US$13 million and 625,000 ordinary shares of AERL. The Seller can receive additional incentives for exceeding these targets. Until June 30, 2016, the Seller shall provide a personal guarantee for any bad loans associated with the Seller’s operations prior to the closing of the acquisition.
Following this transaction, AERL will be able to expand its existing agents network. Upon the closing of the acquisition, AERL will have 40 tables in five VIP rooms.
“We are pleased to have the opportunity to add a VIP room at Le Royal Arc Casino to the Asia Entertainment family, which will enhance our presence in downtown Macau,” said AERL Chairman Lam. “This acquisition will allow us to operate a VIP room under our fourth concessionaire, SJM, which should further expand our competitiveness in the Macau VIP gaming market. In addition, the addition of six more tables should further mitigate volatility from our revenue sharing model, and ultimately provide our shareholders with long-term value.”
About Asia Entertainment & Resources Ltd.
Asia Entertainment & Resources Ltd. is a holding company which operates through its subsidiaries and related promoter companies as a VIP room gaming promoter, and is entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms. AERL’s VIP room gaming promoters currently participate in the promotion of four major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world. One VIP gaming room is located at the top-tier 5-star hotel, the Star World Hotel & Casino in downtown Macau, and another is located in the luxury 5-star hotel, the Galaxy Macau™ Resort in Cotai, each of which is operated by Galaxy Casino, S.A. Additional VIP gaming rooms are located at the Sands Cotai Central and City of Dreams Macau, both in Cotai.
Forward Looking Statements
This press release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of AERL's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements.