Genting Singapore PLC - MANAGEMENT REPLY: Why did it cede control of Stanley Genting Casinos Ltd to Genting Malaysia Bhd?

12/2/2015 – Genting Singapore Plc's indirect associate Stanley Genting Casinos Ltd has sold Stanley Casinos (Leeds) Ltd to Stanley Casinos Holdings Ltd for just £1.

The casino-operator said the £1 consideration was justified as the net asset value of Stanley Genting Casinos (Leeds) Ltd was negative.

In other words, Stanley Genting Casinos (Leeds) Ltd had net liabilities on its books.

In its announcement, Genting Singapore also said that Palomino Sun (UK) Ltd has sold a 0.1% stake Stanley Genting Casinos Ltd to Stanley Casinos Holdings Ltd for £5,900 which was based on the net asset value of Stanley Genting Casinos Ltd.

Genting Singapore invested in Stanley Genting Casinos Ltd more than a decade ago (refer page 19 of the source).

In November 2004, Genting Singapore Plc (then known as Genting International Plc) formed a 50-50 joint venture with the United Kingdom's largest casino operator Stanley Leisure Plc to develop regional casinos in the UK.

The joint venture company was named Stanley Genting Casinos Ltd.

As a part of the joint venture agreement, Stanley Leisure Plc sold Stanley Casinos (Leeds) Limited to Stanley Genting Casinos Ltd for an undisclosed cash consideration.

The key asset of Stanley Casinos (Leeds) Ltd was that it had an option to acquire certain land adjacent to Elland Road in Leeds.

As per the terms of the joint venture, in the event that consent is not given to build a regional casino on this land, it will be sold back to Stanley Leisure at cost.

Investor Central. Asian insights for global investors. We ask the tough questions of Asian companies which global investors need answers to.

Question

1. How much did Stanley Genting Casinos Ltd pay for Stanley Casinos (Leeds) Ltd?

We wonder that because that would help us estimate the value of the option that Stanley Casinos (Leeds) Ltd had to acquire land adjacent to Elland Road in Leeds for building a casino on it.

Question

2. How much did Stanley Leisure Plc contribute for its 50% stake in the joint venture?

Genting Singapore paid £5.4 mln in cash for its 50% stake in Stanley Genting Casinos Ltd.

However, we don't know how much Stanley Leisure Plc contributed for its 50% stake in Stanley Genting Casinos Ltd.

This is important because it would help us estimate the worth of Stanley Genting Casinos Ltd.

(Read the full story to get all 7 questions)

Spokeswoman Ms Lee Sin Yee replied, "We have nothing further to add, other than what was in the SGX announcement. On question 7, it was a letter of censure, and no fine."

We thank the management for the response.

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