Melco International Development Ltd., a Hong Kong-listed company that offers various gaming and accommodation options in the region, was announced to have subscribed to a total of 26,062,294 shares of common stock in gaming distributor Entertainment Gaming Asia Inc. also known as EGT.
EGT provides Asian-based casinos with slot machines, gaming chips, and plaques. At present, the company also manages Dreamworld Club, a gaming venue in the northwestern part of Cambodia.
Melco’s subsidiary EGT Entertainment Holding Ltd. had to pay over US$14 million, in order to be able to subscribe to the above-mentioned shares in EGT.
EGT, listed on the NASDAQ Stock Market, announced the successful completion of its share sale. The company’s gross profits reached the sum of US$15 million. A total of 27,777,673 shares were sold or 100% of the shares in the rights offering issue. The price per share amounted to US$0.54.
As the rights issue is completed now, EGT Entertainment Holding Ltd. is in possession of a total of 37,512,294 shares in EGT. Thus, Melco’s subsidiary owns 64.81% of EGT’s outstanding shares of common stock.
As Melco International announced a few hours ago, EGT is now practically a subsidiary of the company.
Melco International Development Ltd. is currently managed by Lawrence Ho Yau Lung, the eldest son of Asian business mogul Stanley Ho. The company is one of the two largest shareholders of Melco Crown Entertainment Ltd., the popular Macau-based casino operator. Its other major shareholder is Australia’s Crown Resorts Ltd.
Clarence Chung Yuk Man, chairman and chief executive at EGT, was the one to announce the completion of the rights issue. He made sure to express his gratitude towards all the stockholders who took part in the sale and more particularly towards Melco International for their constant support.
Mr. Chung also stated that the share sale was an important step towards company’s determination to improve its “capital resources and liquidity”. What is more, they will keep on looking for relevant gaming projects to offer to Asian gaming market.
It was also announced that EGT will most probably invest the profits from the share sale into new casinos and other gaming venues. In addition, it also intends to additionally expand its slot machines business all around Asia.
Back in October, EGT posted a net loss totaling to US$261,000 for the quarter between July 1 and September 30. By comparison, the company reported a US$309,000 loss this time last year.
On Monday, the company’s stock price grew by 7.55% in New York, reaching US$0.57 per unit by the end of the day.
EGT will also have to regain compliance with the minimum bid price per share, which is US$1.0, up until April 13, 2015.
