Keeping it in the family


Two companies controlled by local gaming promoter Suncity Group Holdings Limited are seeking to increase annual caps for hotel accommodation and related services procurement agreements between them, a Hong Kong Stock Exchange release announced yesterday.
According to the filing, on February 6 of this year Sun Travel Ltd. entered into a procurement agreement for hotel accommodation and related services to be provided by Sun City Gaming Promotion for a period between March 31 and December 31 of this year.
The initial agreement included an annual cap amount for the continuing connected transaction of HK$120 million (US$15.4 million) in relation to the procurement services contemplated, an amount the group is hoping to raise to HK$420 million.
It is also planned to revise the annual caps for 2018 and 2019 to HK$570 million and HK$590 million, respectively.
The reason for the annual cap increase, according to the release, is due to 35.6 per cent of the initial amount having already been used within the first month of the agreement.
‘Riding on the trend, it is expected that the Original Annual Cap will be exceeded before the expiry of the Initial Term,’ says the filing.
According to the release, the new cap amounts were set taking into account factors such as the actual procurement volume of the hotel accommodation products in the whole month of April – which reached a value of approximately HK$42.7 million – and the number of guests who booked 5-star hotels via travel agencies in 2016.
The new agreement will be discussed by a committee of independent shareholders, with the Chairman of Suncity Group, Alvin Chau Cheok Wa, and his associates abstaining from voting.
As Chairman and Executive Director of Sun City Gaming Promotion, Chau owns almost 72.2 per cent of the company, with Sun Travel an indirect wholly-owned subsidiary of the Suncity Group.