The announced ownership transformation of the Tigre de Cristal integrated resort near Vladivostok in Russia has come to a halt. As reported, the Russian company Dalnevostochnyj Aktiv LLC has withdrawn from the $116 million acquisition deal with termination notice given to Summit Ascent, the company currently controlling the resort.
Termination Notice:
As reported by Inside Asian Gaming (IAG), Tigre de Cristal operator Oriental Regent Ltd – a vertical of Summit Ascent and its parent company LET Group Holdings – received the Russian company’s notice of withdrawal from the agreement on February 19, 2024. On the occasion, Dalnevostochnyj Aktiv LLC reportedly provided Oriental Regent Ltd with a “notice of unilateral extrajudicial repudiation (withdrawal from execution) of the Agreement”. According to IAG, the notice was served to terminate the deal anticipating the acquisition of G1 Entertainment LLC for $116 million. G1 Entertainment is the company behind the Tigre de Cristal operator Oriental Regent Ltd, according to the source.
Seeking Legal Advice:
However, the same source reports that Summit Ascent holds a controlling 77.5% stake in Oriental Regent. At the same time, LET Group reportedly has a 69.66% stake in Summit Ascent. Following the termination notice, LET and Summit Ascent will reportedly be seeking the respective legal advice as the interruption of the deal has already affected their stock listings. Also, IAG reports about the controversial nature of the proposed sale of Summit Ascent’s stake in Tigre de Cristal driving directors of both Summit Ascent and LET Group to resign. The only member of the board still involved in these operations is Chairman Andrew Lo Kai Bong, as IAG reports.
Raising Conduct and Ownership Concerns:
It seems that Hong Kong’s Securities and Futures Commission (SFC) shared the same opinion. The Commission reportedly rose ‘’serious concerns about the conduct” of management of both companies, indicating that ‘’the sale had been agreed without the necessary approval of shareholders, and that the companies had failed to respond to requests from the SFC to address its concerns’’.
The source reports that the termination comes after Summit Ascent suspended its expansion plans for the Tigre de Cristal resort in March 2022 due to the conflict between Ukraine and Russia and the associated economic restrictions. In March 2023, the company announced that it would reportedly seek strategic local partners to operate Tigre de Cristal due to such restrictions.
At the same time, Taiwanese company Firich Investment Ltd reportedly announced that it would sell 100% of its shares in G1 Entertainment LLC – the company controlling the operator of Tigre de Cristal resort – to a local Russian company for a total consideration of US$116 million. Dalnevostochnyj Aktiv LLC was seemingly supposed to be such a strategic partner of Firich Investment, Summit Ascent and its parent LET Group Holdings. But the termination notice delivered on February 19, 2024 seems to close the deal and open questions for the resort’s future ownership structure.